Mexican satellite operator Satmex has completed the US$325m bond offering that is integral to its Chapter 11 prepack reorganisation plan.
As SatelliteFinance previously reported, the notes priced well below the 12% that had been mooted by some fund…
Mexican satellite operator Satmex has completed the US$325m bond offering that is integral to its Chapter 11 prepack reorganisation plan.
As SatelliteFinance previously reported, the notes priced well below the 12% that had been mooted by some fund managers, carrying a coupon and yield (having priced at par) of 9.5%. Jefferies & Co was sole book-running manager for the transaction.
The senior secured notes, rated B3 by Moody’s and B by S&P, are due to mature on 15 May 2017, non-call for the first three years, with semi-annual interest payments in May and November.
The notes have been issued by Satmex Escrow, a bankruptcy-remote wholly owned subsidiary of Satmex.
Satmex Escrow will subsequently merge with Satmex following the latter’s emergence from Chapter 11 bankruptcy protection, which is expected to take place on 26 May 2011 once the US$96.25m fully-backstopped rights issue to the second lien senior secured note holders is completed.
The US$197.9m of outstanding debt currently held by the second priority noteholders is to be converted into equity as part of the reorganisation plan.
Proceeds from both the debt and equity financing will be used to repay the US$238m outstanding of first priority senior secured notes due 2011 as well as fund the construction and launch of Satmex-8, which is set to replace Satmex-5 in 2012 and is seen by creditors as vital for preserving the value of the group. Satmex 5 was responsible for 39% of the satellite operator’s revenues in 2010.
Satmex-8, which will have a capacity at least 45% higher than its predecessor, has been under construction by Space Systems Loral since mid-2010 and is scheduled to be launched in August 2012.
Capital expenditure requirements connected to the spacecraft are understood to be around US$186m to be paid over the next two years.
Lazard and its Mexican alliance partner, Alfaro, Davila y Rios, are acting as financial advisers to Satmex.
Greenberg Traurig is the company’s US counsel, with Santamarina y Steta and Rubio Villegas & Asociados its Mexican counsels.
Jefferies is acting as financial adviser to certain second priority notes holders, with Ropes & Gray and Cervantes Sainz serving as US and Mexican counsels to this group, respectively.
Meanwhile, Dechert and Galicia Abogados are, respectively, acting as US and Mexican counsels to certain holders of the first priority notes.
