Tuesday, March 9, 2010

Notable financing, from DIRECTV (DTV)

The price at which companies raise money says a lot about the quality of their cash flows.

DIRECTV just priced $3billion in debt for VERY attractive prices:

EL SEGUNDO, Calif.--(BUSINESS WIRE)--DIRECTV Holdings LLC (the "Company"), an indirect subsidiary of DIRECTV (NASDAQ:DTV - News), announced today the pricing of an issuance of $1.2 billion of 3.550% Senior Notes due 2015, $1.3 billion of 5.200% Senior Notes due 2020 and $0.5 billion of 6.350% Senior Notes due 2040 (together, the “Notes”). The closing of the offering is expected to occur on March 11, 2010, subject to satisfaction of customary closing conditions. The Company will receive net proceeds of approximately $2.98 billion from this offering and intends to use the net proceeds from the offering for general corporate purposes, which may include the repayment of some or all of the Company's Term Loan C issued under its senior secured credit facility, a distribution to its parent, DIRECTV, for its share repurchase plan and other corporate purposes.


The company's other 2015 debt, with a coupon of 6.375%, trades at 104cents on the dollar to yield in the 2% range, showing how much the company's financial health has improved.  That low yield is because a potion of that will be retired, but even this new offering is almost half what it used to cost this company to raise debt.


The cost of this new capital looks to be about half their trailing Free Cash Flow Yield.








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