S&P assigns BB to DirecTV facilities

S&P said it assigned BB issue-level and 2 recovery ratings to DirecTV Financing LLC's planned extended credit facilities, including the $500 million revolving credit facility due 2028 and $1.25 billion first-lien term loan due 2029. The 2 recovery rating indicates substantial (70%-90%; rounded estimate: 70%) recovery in default.

The agency rates DirecTV Financing’s outstanding senior secured debt BB with 2 recovery ratings.

“Our BB- issuer credit rating on parent DirecTV Entertainment Holdings LLC is unaffected by this leverage-neutral transaction. We view it favorably from a liquidity standpoint because it will smooth the company's maturity profile, extend the revolver to 2028 and result in slightly lower interest expense. We expect the company will continue to operate with debt to EBITDA of 1x-1.5x over the next year, which is strong for the rating,” S&P said in a press release.

The company plans to use the proceeds to refinance a portion of the $3.1 billion term loan B due 2027.

The outlook for DirectTV Entertainment remains stable.

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