Canadian satellite operator Telesat has launched its US$2.55bn refinancing that would pave the way for its planned special dividend payment of approximately C$705m.
The financing comprises a US$1.9bn senior term loan B, a portion of which may be…
Canadian satellite operator Telesat has launched its US$2.55bn refinancing that would pave the way for its planned special dividend payment of approximately C$705m.
The financing comprises a US$1.9bn senior term loan B, a portion of which may be denominated in Canadian dollars, a C$496m (US$500m) senior term loan A and a C$149m (US$150m) revolving credit facility. While terms have yet to be decided, SatelliteFinance understands that the term loan B will have a tenor of around seven years and the term loan A around five years.
JP Morgan, Credit Suisse, Morgan Stanley and UBS are joint lead arrangers and joint bookrunners, while CIBC, ING and Scotiabank are as co-managers on the term loan B.
CIBC and JP Morgan are JLAs and joint bookrunners, with Credit Suisse, ING, Morgan Stanley, Scotiabank and UBS as co-managers on both the term loan A and the revolver.
The financing, which is rated Ba3 by Moody’s, is expected to close before the end of March.
It is expected that approximately US$2bn of the proceeds will be used to replace the US$1.8bn term loan and US$150m term loan II facility that mature in October 2014. This will leave Telesat with around US$550m in incremental debt that along with cash-on-hand of C$278m will be paid as a special dividend to shareholders Loral Space & Communications and Public Sector Pension Investment Board (PSP).
In addition, upon completion of the refinancing, all of Telesat Holdings’ outstanding senior preferred shares, which are currently held by an affiliate of PSP, would be redeemed in exchange for a note of the same amount issued by Telesat. The note would be worth approximately C$146m, pay an interest of 9.75% for the first two years, when at least 50% of it would need to be repaid, and then at least 11% until it matures 31 March, 2016.
