Shares in Pegasus surged more than 40% ($5.76) between Oct. 23 and Oct. 24, after the reseller of DirecTV Inc. direct-broadcast satellite service engineered a loan some investors saw as providing much-needed relief.
The stock rose 27% ($3.75) to $17.50 on Oct. 23, the day of the announcement, and continued to rise another 11.5% ($2.01) the next day, closing at $19.51. The stock fell back to $18 on Oct. 27, rising to $18.66 on Oct. 28.
Subsidiary Pegasus Media & Co. closed a $300 million term loan on Oct. 23, used to pay off earlier loans scheduled to mature in 2004 and 2005. The new loan facility matures in 2006. Banc of America Securities served as sole lead arranger.
The old loan facility required Pegasus to reduce the amount of credit available every quarter. Removing that stipulation enables Pegasus to draw on the facility when it needs it.
Pegasus said part of the new loan facility would be used for working capital and for general corporate purposes.