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

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Jack Pitcher
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(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.

An investor call for the six-year secured bonds is set for 10:30 a.m. in New York on Monday and the bonds are set to price on Thursday, 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.

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