DirecTV to launch $3.6 billion credit facilities on Thursday

By Sara Rosenberg

New York, July 7 – DirecTV Financing LLC is scheduled to hold a lender call at 11 a.m. ET on Thursday to launch $3.6 billion of credit facilities (Ba3/BB/BBB-), according to a market source.

Credit Suisse Securities (USA) LLC, BofA Securities Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., BMO Capital Markets, Goldman Sachs Bank USA, Mizuho, MUFG, UBS Investment Bank, Barclays and Jefferies LLC are the lead arrangers on the deal.

The facilities consist of a $500 million revolver and a $3.1 billion six-year covenant-lite first-lien term loan, the source said.

Price talk on the term loan is Libor plus 525 basis points with a 0.75% Libor floor and an original issue discount of 98.

The term loan is non-callable for one year, then at par, and has amortization of 10% per annum.

Commitments are due at 5 p.m. ET on July 22, the source added.

Proceeds will be used to help fund the creation of the company through the spinoff of DirecTV, AT&T TV and U-verse video services from AT&T Inc.

TPG Capital will contribute $1.8 billion in cash to DirecTV in exchange for preferred units senior preferred units with a 10% cash coupon and a 30% interest in the company. AT&T is getting $4.25 billion of junior preferred units with a 6.5% payment-in-kind coupon, an additional distribution preference of $4.2 billion and a 70% economic interest in the company.

DirecTV has an implied enterprise value of $16.25 billion.

Closing is expected in the second half of 2021, subject to customary conditions and regulatory reviews.

DirecTV is a video services company.

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