Intelsat has raised US$1.2bn through a senior bond offering in order to refinance a portion of its existing debt.
Via subsidiary Intelsat Jackson, the satellite operator issued US$1.2bn of 7.25% senior notes, due 2020. The notes priced at 101.75 to…
Intelsat has raised US$1.2bn through a senior bond offering in order to refinance a portion of its existing debt.
Via subsidiary Intelsat Jackson, the satellite operator issued US$1.2bn of 7.25% senior notes, due 2020. The notes priced at 101.75 to yield 6.91% and were issued under the same indenture as Intelsat Jackson’s existing US$1.011bn 7.25% senior notes, also due 2020.
Goldman Sachs and Morgan Stanley are lead managers on the transaction, which is expected to be completed imminently.
Net proceeds will be used to fund the tender offer for any and all of the subsidiary’s US$701.913m outstanding 9.5% senior notes, due 2016, and up to US$470m of its US$1.0482bn 11.25% senior notes due 2016.
The deadline for the tender offer is 9 May 2012. Goldman Sachs is the dealer manager.
An Intelsat spokesperson told SatelliteFinance that the reason behind the refinancing was in order to take advantage of the favourable conditions currently in the US bond market. Indeed, strong investor demand pushed up the overall size of the offering by US$400m thereby enabling Intelsat to seek to repurchase all of its 9.5% notes rather than the initially planned US$310m.
As an adjunct to the bond offering, the two banks have also agreed to commit to an unsecured 2-year term loan of approximately US$354m in order to refinance Intelsat SA’s 6.5% senior notes due 2013 of the same amount. The spokesperson said that the loan would only be provided if Intelsat cannot tap the bond markets due to worsening conditions.
The 2013 notes are the next in line to mature with Intelsat Jackson’s senior unsecured term loans of US$758m and US$182m then due in 2014.
Meanwhile, in an SEC filing Intelsat revealed that a new parent company had been formed. Intelsat Global Holding has acquired all the outstanding shares of Intelsat Global, the ultimate parent of the satellite operator.
The reason behind the move is understood to be due to positioning the company in line with other large Luxembourg companies and allows for certain favourable tax conditions.
In order to undertake such a transaction, the company must secure 100% shareholder approval, something which is far easier when the company is private rather than public. At the end of last year, Intelsat laid the foundations for an initial public offering that would pave the way for a full or partial exit for its private equity owners led by BC Partners and Silver Lake Group.
