Moody's lifts DirecTV from junk

Moody's Investors Service said it upgraded DirecTV Holdings LLC's, the wholly owned U.S. subsidiary of publicly owned DirecTV, senior unsecured ratings to Baa3 from Ba2.

The outlook is stable.

The upgrade was driven by the chief executive officer Michael White and board of directors' unqualified commitment to sustaining the company's investment-grade credit profile, according to the agency.

Moody's said its view is supported by White's history of working for PepsiCo, Inc. (Aa3 senior unsecured) for almost 20 years, including as his job as chief financial officer, which has shaped an investment-grade mindset that will help guide the company's future financial policies.

DirecTV's debt-to-EBITDA leverage is about 1.5x as of Dec. 31.

The Baa3 senior unsecured rating reflects the consistent and sizeable cash flows the company generates from its position as one of the leading video providers in the United States, its strong credit metrics and strong liquidity profile, the agency said.

The rating is constrained by competition from standalone triple-play providers, which will gradually pressure subscriber churn, retention costs and margins over the longer-term, the agency noted.

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