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DirecTV to Sell $3.1 Billion of Junk Bonds As Part of AT&T Split

DirecTV to Sell $3.1 Billion of Junk Bonds As Part of AT&T Split

(Bloomberg) — DirecTV is selling $3.1 billion of junk bonds to help back its split from AT&T Inc., according to a person familiar with the matter.

The six-year secured bonds are set to be sold on Thursday, and may yield around 6% to 6.5%, said the person who asked not to be identified as the details are private.

The proceeds, along with cash from the company’s term facility, will be used to help refinance debt owed to AT&T. AT&T announced it would spin off long-struggling DirecTV earlier this year, setting up a joint venture with private equity firm TPG to run DirecTV and AT&T’s other pay-TV operations. The private equity firm is acquiring a 30% stake in the venture. The deal valued the company at about $16 billion, a fraction of what AT&T paid in 2015.

DirecTV is also marketing a $3.1 billion leveraged loan to back its split from AT&T, offering yields higher than normal for its rating category. Lender commitments are due on Thursday for that debt.

Read More: DirecTV Is Marketing $3.1 Billion of Loans to Back AT&T-TPG Deal

Credit Suisse Group AG, Bank of America Corp., Deutsche Bank AG, HSBC Holdings Plc, Bank of Montreal, Goldman Sachs Group Inc., Mizuho Financial Group Inc., Mitsubishi UFJ Financial Group Inc., UBS Group AG, Barclays Plc and Jefferies Financial Group Inc. are leading the bond sale, the person said.

(Updates with initial price talk in second paragraph)

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Julia Mangels

Julia has handled various businesses throughout her career and has a deep domain knowledge. She founded Stock Market Pioneer in an attempt to bring the latest news to its readers. She is glued to the stock market most of the times and just loves being in touch with the developments in the business world.

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