DirecTV Joins Ford Selling Euro Bonds as Discount to U.S. Widens

DirecTV, the largest U.S. satellite-television provider, and Ford Motor Co. are issuing euro-denominated bonds as the yield discount to U.S. dollar notes increased to the biggest in nearly three years.

DirecTV is offering 500 million euros ($648 million) of 10-year notes, its first sale in the currency, according to a person familiar with the matter. Ford, the second-largest U.S. carmaker, is also selling 500 million euros of bonds through its FCE Bank Plc unit, another person said.

U.S. issuers including Microsoft Corp. and AT&T Inc. raised

17.2 billion euros from bond sales this year, the most since the start of 2008 and about seven times more than the same period last year, according to data compiled by Bloomberg. The average yield on investment-grade euro corporate bonds is 1.79 percent, 98 basis points less than comparable dollar notes, the biggest discount since June 2010, Bank of America Merrill Lynch indexes show.

“Some U.S. companies are looking to diversify and they’re making the most of the opportunity to issue longer-dated euro notes,” said Tim Butcher, an analyst at Scottish Widows Investment Partnership in Edinburgh, who said the firm is considering investing in DirecTV’s bond. “DirecTV’s deal may offer a slight premium as it’s a new name in the euro market.”

Ford Sale

DirecTV’s euro bonds will be priced to yield 120 basis points more than the benchmark mid-swap rate, down from 125 to 130 basis points that was initially marketed, according to the person, who asked not to be identified because the details are private.

The El Segundo, California-based company last sold bonds in January, when it raised $750 million for a potential share buyback, it said at the time. DirecTV, which is rated BBB or two levels above junk by Standard & Poor’s, issued its first bonds in pounds in September, data compiled by Bloomberg show.

Cara Brugnoli, a spokeswoman for the company, didn’t immediately respond to an e-mail seeking comment on the sale outside of office hours.

Dearborn, Michigan-based Ford is selling five-year securities that will be priced to yield 105 basis points more than swaps, according to the person familiar with the matter. It is the carmaker’s biggest euro sale since February, when it sold 600 million euros of 1.875 percent notes due May 2016, data compiled by Bloomberg show.

Christopher Makin, a Warley, England-based spokesman for Ford, declined to comment on the fundraising.

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