UK-based satellite operator Inmarsat has sold US$200m worth of 7.375% senior notes due 2017 for general corporate purposes.
The notes were priced at 106% on 5 April, which is understood to be at the top of price talk range of 105.5%-106% on a bad…
UK-based satellite operator Inmarsat has sold US$200m worth of 7.375% senior notes due 2017 for general corporate purposes.
The notes were priced at 106% on 5 April, which is understood to be at the top of price talk range of 105.5%-106% on a bad market day that saw Crown Castle, the US mobile towers company, withdraw its proposed bond because of difficult conditions. Inmarsat’s new bond, which will be issued on 11 April, traded up in the aftermarket to 107%-107.5%.
Credit Suisse and Barclays Capital are understood to be the bond’s lead bookrunners, with Credit Agricole, Mizuho, RBC and RBS being assigned as joint bookrunners for the offering.
Inmarsat, which as of the end of December 2011 had a Net debt / EBITDA ratio of 1.6x, declined to comment on the bond’s details. However, in a stock exchange announcement it said it will “be treated as one class of securities, having the same terms and rights, as Inmarsat’s existing 7.375% senior notes due 2017 in all respects”.
The satellite operator’s existing 7.375% notes due 2017 notes were issued on 12 November 2009 for US$650m, of which the company received US$645.2m following fees.
Barclays, BNP Paribas, Calyon, Credit Suisse, Daiwa, ING, Lloyds, Natixis, Royal Bank of Canada and RBS were lead managers on the previous offering.
The company was unable to offer further details on its upcoming issuance before the press deadline.
Its proposed notes were rated B++ by Standard & Poor’s, and Ba2 by Moody’s.
Moody’s said its rating was partly boosted by Inmarsat’s stated objective to limit leverage to a range of 2-3x net debt/EBITDA. However, it was also held back by factors including expected competition from other MSS players, as well as from FSS and terrestrial cellular operators. The ratings agency also highlighted the likely cessation of payments under Inmarsat’s cooperation agreement with struggling US satellite/terrestrial venture LightSquared, as well as a likely increase in leverage and a degree of execution risk from deploying the planned Inmarsat-5 satellite constellation.
“The challenge for the company to rekindle MSS growth together with the likely cessation of LightSquared payments have weakened Inmarsat’s position at the current Ba1 CFR rating,” explained Moody’s.
As well as the existing US$650m 7.375% notes due 2017, Inmarsat’s debt comprises a US$750m revolver due 2016, a two-tranche European Investment Bank loan totalling around US$308m and due in 2018, US$287.7m in convertible bonds, and a 12.5-year US$700m loan secured with the Export-Import Bank of the US on 11 May 2011.
On 6 March 2012, Inmarsat posted preliminary full-year results for 2011 that showed total revenue up 20% to US$1.409bn, compared with US$1.172bn for 2010. It posted 2011 EBITDA up 23% to US$854m, compared with US$696m for the year before.
