DIRECTV Holdings LLC -- Moody's assigns a Prime-2 short term rating to DIRECTV for its new commercial paper program

New York, November 19, 2012 -- Moody's Investors Service assigned a Prime-2 short-term rating to DIRECTV Holdings LLC ("DTV Holdings" - Baa2 senior unsecured rating) for its new $2.5 billion 4(a)(2) commercial paper program. The commercial paper will have a maturity of up to 397 days from the date of issue, and will rank equally with the company's existing senior unsecured indebtedness. The notes are expected to have upstream guarantees from substantially all of DTV Holdings' subsidiaries and a downstream guarantee from the parent, DIRECTV, like the company's other senior unsecured indebtedness. Any proceeds from the issuance of commercial paper notes will be used for general corporate purposes.

The program is backed by the company's $2.5 billion revolving credit facilities, consisting of a $1.0 billion revolver due February 2016 and a $1.5 billion revolver due September 2017, which are provided by a diverse group of banks. The bank facilities have same day availability and do not have a material adverse change clause which could limit availability when the company most needs liquidity. While the facilities contain a maximum leverage ratio covenant (5.0x), we expect the company to maintain considerable cushion against its covenant.

RATINGS RATIONALE

DTV Holdings' Baa2 senior unsecured ratings reflect the consistent and sizeable cash flows it generates from its position as one of the leading pay-TV providers in the U.S. The company's unqualified commitment to sustaining investment-grade credit metrics and strong liquidity profile further support the rating. However, the rating continues to be somewhat constrained when compared to its wireline cable and phone company competitors by our expectation that competition from stand alone triple-play (video, high speed data and voice) providers will limit growth in the U.S., gradually pressure subscriber churn, retention costs and margins over the longer-term.

The stable rating outlook is driven by DIRECTV's strong operating performance and our expectation that its debt-to-EBITDA leverage (incorporating Moody's standard adjustments) will be sustained at moderate levels below 2.75x.

DIRECTV's ratings could be upgraded if the company were to commit to and sustain its debt-to-EBITDA leverage under 2.0x (incorporating Moody's standard adjustments), and it maintains a stable subscriber base.

There would be downward pressure on the ratings if DIRECTV's leverage were to increase and be sustained above 2.75x (incorporating Moody's standard adjustments), or if we expect retention costs to spiral upward or subscriber numbers to trend materially downward, which would result in material margin and EBITDA contraction. It also could face pressure if the company incurs a material amount of debt at its Latin American subsidiaries causing a structural subordination issue for the rated outstanding debt at DTV Holdings while at the same time, leverage solely at the US operations remains above 2.75x.

DTV Holdings' ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside DTV Holdings' core industry and believes DTV Holdings' ratings are comparable to those of other issuers with similar credit risk.

DIRECTV is the parent company of DIRECTV Holdings LLC (DTV Holdings), which is the largest direct-to-home (DTH-satellite) pay-television provider in the U.S. with about 20 million subscribers as of 9/30/2012. DIRECTV also provides DTH pay-TV services in Latin America (DTV Latin America), with wholly owned operations in PanAmericana and 93% ownership of Sky Brazil, to a total of 9.7 million subscribers as of 9/30/2012. It has a 41% ownership in SkyMexico (which is not consolidated in its financials), three regional sports networks and a 60% interest in Game Show Network (not consolidated). Revenue for the LTM period ended 9/30/12 for DIRECTV and DTV Holdings approximate $29 billion and $23 billion, respectively.

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Neil Begley Senior Vice President Corporate Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653John Diaz MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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