Intelsat has secured a US$3.75bn debt facility that will be used to refinance the senior secured credit facilities held by its Intelsat Corp and Sub Holdco subsidiaries. The move is part of Intelsat’s intention to simplify its capital structure.
The new…
Intelsat has secured a US$3.75bn debt facility that will be used to refinance the senior secured credit facilities held by its Intelsat Corp and Sub Holdco subsidiaries. The move is part of Intelsat’s intention to simplify its capital structure.
The new facility, which was taken out through subsidiary Intelsat Jackson, is split between a US$3.25bn senior secured term loan B and a revolving credit facility of up to US$500m. SatelliteFinance understands that the term loan has a tenor of approximately 7.25 years and priced at a 99.5% issue discount at 375bp over a Libor floor of 1.5%. The revolver is due to mature in approximately five years.
Intelsat had originally intended for the size of the term loan to be approximately US$2.35bn with an additional US$500m being raised through a senior secure note offering of around US$500m.
However, the loan was twice increased, first by US$500m to US$2.85bn after the planned bond issue was scrapped and then a further US$400m to US$3.25bn due to demand.
Proceeds from the facility have been used straight away to repay Intelsat Sub Holdco’s US$330.2m outstanding of senior secured term loans due 2013 and Intelsat Corp’s US$1.72bn outstanding of senior secured term loans due 2014 and US$151m outstanding of senior secured term loans due 2012.
A further US$580.7m has been used to fund the redemption of Intelsat Corp’s 9.25% senior unsecured notes due 2016, while Intelsat Corp also expects to redeem the US$111.8m outstanding of 9.25% senior unsecured notes due 2014. The deadline for the tender offer for those notes is 20 January.
On completion, the legacy businesses of Intelsat Corp and Intelsat Sub Holdco will effectively combine.
BofA Merrill Lynch (MLA), Credit Suisse, JPMorgan, Barclays Capital, Deutsche Bank, Morgan Stanley and UBS acted as joint book runners on the financing with Goldman Sachs, RBC Capital Markets and HSBC co-managers.
As SatelliteFinance previously reported, the refinancing and subsequent simplifying of the company’s capital structure is understood to be in preparation for a potential bid for fellow FSS operator Telesat.
A number of sources have suggested that Intelsat has been sounding out a number of potential equity investors, including three sovereign wealth funds, with the intention of generating enough financial muscle to fund a bid. Intelsat would not comment on these rumors.
Bank of America is believed to be advising Intelsat on both its equity financing plans and the potential Telesat bid, with Milbank Tweed Hadley McCloy acting as its legal counsel. Credit Suisse and JPMorgan are understood to be advising both Loral and Telesat.
