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DirecTV (DTV) raised $750 million with bonds that may fund share repurchases at the largest U.S. satellite-TV operator, whose stock trades cheaper relative to earnings than its average U.S. competitor.
The company issued 1.75 percent, five-year securities that yield 115 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg. Proceeds from the sale may be used to buy back stock, El Segundo, California-based DirecTV said today in a regulatory filing.
Of the company’s $17.2 billion of bonds outstanding, no debt had been slated to mature in 2018 before today’s sale, Bloomberg data show. While DirecTV shares have gained (DTV) more than 20 percent in the last 12 months, the stock trades at a price- to-earnings multiple of 12.7, less than the 17.4 average among U.S. cable and satellite companies.
The new bonds were rated Baa2 by Moody’s Investors Service and BBB from Standard & Poor’s.
DirecTV had about $2.97 billion of authorized stock repurchases remaining on Sept. 30, according to a quarterly filing. The company spent about $3.9 billion on buybacks in the first nine months of 2012.
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