UK-based satellite operator Avanti Communications has raised US$157.5m from a US bond offering. Proceeds are to be used to fund the purchase of the company’s fourth satellite, Hylas-4.
The placement was a tap issue on the USS$370m debut bond offering…
UK-based satellite operator Avanti Communications has raised US$157.5m from a US bond offering. Proceeds are to be used to fund the purchase of the company’s fourth satellite, Hylas-4.
The placement was a tap issue on the USS$370m debut bond offering that Avanti completed in September 2013.
The performance of those unlisted 10% senior secured six-year notes in the secondary market over the past six months persuaded the company to return to the US capital markets for its latest financing.
And so it proved with the bond offering pricing at 105% to the September 2013 issue price resulting in a yield to maturity of 8.575%.
Jefferies acted as sole book runner for the financing.
The existing notes were the subject of an amendment agreement to permit the issuance of new debt. Under the bondholder consent, Avanti is also able to raise an additional US$125m of the notes to fund the new satellite. This transaction is expected to take place in 2015.
The balance of funding costs for Hylas-4, estimated at around US$100m, is to be raised though the issuance of junior capital in 2015.
Avanti stated that it expects to execute contracts for both the construction and launch of the satellite shortly.
The new satellite will launch in 2017 to serve new markets in Africa, as well as provide expansion capacity for existing customers in areas of Europe and Africa that are covered by Hylas-1 and -2.
Commenting on the financing and Hylas-4, Avanti CEO David Williams said: “We are delighted to receive the strong support of our existing and new bond investors to proceed with the Hylas-4 project using attractively priced and highly flexible capital.
“This satellite will give us ubiquitous coverage of Sub-Saharan Africa, as well as expansion capacity in Europe and some new capacity in Latin America.
“The design is based on the requirements of existing and certain potential new customers. It will almost double the total fleet capacity as well as providing a powerful strategic and competitive advantage.
“Given the attractive financing structure, we believe it offers a significant enhancement to returns for shareholders.”
