Asian satellite operator ABS is eyeing a US$250m high-yield bond issue in order to help finance its ABS-2 spacecraft, SatelliteFinance has learnt. Along with its new private equity owner, Permira, ABS is understood to have sent RFPs to banks to pitch…
Asian satellite operator ABS is eyeing a US$250m high-yield bond issue in order to help finance its ABS-2 spacecraft, SatelliteFinance has learnt.
Along with its new private equity owner, Permira, ABS is understood to have sent RFPs to banks to pitch for the mandate with the intention of completing the bond offering in the first quarter of 2011.
Rumours about the likelihood of a high-yield debt financing first arose after ABS announced that it would be pushing ahead with the acquisition of ABS-2 in the wake of its acquisition by Permira.
A spokeswoman for ABS confirmed to SatelliteFinance last month that ABS-2 will cost US$340m and that around US$110m of this cost will be financed via ABS’s existing cash flow.
Just over US$150m is to be raised through a condosat agreement with Asian telecoms operators Korea Telecom and Singtel, requiring ABS to pre-sell the satellite’s transponders.
The spokeswoman said that the remaining US$80m would be raised via an equity or debt financing.
The ABS-2 is vital to the operator’s future international growth, given that the group’s five in-orbit satellites are all more than 10 years old. The new satellite, which will be built by Space Systems/Loral and is due to be launched in early 2013, will carry up to 87 C-band, Ku-band and Ka-band transponders, and will be placed at 75E, covering the Middle East, Africa, Asia Pacific and CIS/Russia.
Back in mid-September, Permira announced it had acquired a majority stake in ABS through an all equity deal worth in the region of US$200m. The deal, which was completed on 15 November, was conducted via the purchase of ABS holding company Kingsbridge from majority shareholder and part-founder Citi Venture Capital International (CVCI), as well as ADM Capital and other undisclosed shareholders.
