DirecTV Completes $2.5B Credit Facility

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DirecTV Group Inc.’s DirecTV Holdings LLC subsidiary said Wednesday that it has completed its previously announced senior-secured-credit facility.

The direct-broadcast satellite company elected not to proceed with an anticipated $500 million unsecured-notes offering, boosting the size of the facility to $2.5 billion.

The new senior-secured-credit facility consists of a $500 million undrawn six-year revolving-credit facility, a $500 million six-year term-A loan and a $1.5 billion eight-year term-B loan. The interest rate on each of the loans is currently LIBOR (London inter-bank offer rate) plus 1.5% per annum.

The facility is secured by substantially all of DirecTV Holdings’ assets and its domestic subsidiaries, and it is guaranteed by all of its domestic subsidiaries.

Proceeds were used to repay the existing $1 billion senior secured loan, to replace an undrawn $250 million revolving-credit facility, to repay an unsecured $875 million note owing to DirecTV Group and to pay transaction costs, with the remaining proceeds available for working capital or other purposes.

Bank of America N.A. was the administrative agent and collateral agent for the facility and JP Morgan Chase Bank N.A. was the syndication agent. Bank of America Securities LLC and J.P. Morgan Securities Inc. were co-lead arrangers and co-book managers, while Credit Suisse First Boston, Goldman Sachs Credit Partners L.P. and Citicorp North America Inc. acted as co-documentation agents.

DirecTV Group also announced that two of its subsidiaries -- DirecTV Holdings and DirecTV Financing Co. -- have elected to redeem $490 million aggregate principal amount of their outstanding 8.375% senior notes due 2013, representing 35% of the $1.4 billion aggregate principal amount outstanding.

The redemption date will be May 19 and, in accordance with the terms of the indenture governing the notes, the redemption price will be 108.375% of the principal amount, plus accrued and unpaid interest, for a total of approximately $538 million.

The issuers are exercising their option to redeem a portion of the notes with the proceeds of an equity investment DirecTV Group has made in DirecTV Holdings.

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