Intelsat is to raise US$1bn in 7.25% senior notes maturing in 2020 via its subsidiary Intelsat Jackson. Credit Suisse is lead manager on the deal with Barclays, Deutsche Bank and Morgan Stanley as joint bookrunners. As with previous Intelsat bond…
Intelsat is to raise US$1bn in 7.25% senior notes maturing in 2020 via its subsidiary Intelsat Jackson. Credit Suisse is lead manager on the deal with Barclays, Deutsche Bank and Morgan Stanley as joint bookrunners.
As with previous Intelsat bond issues, the offering is an opportunistic one, taking advantage of the current buoyant investor demand in the high yield bond markets. Speaking on the investment banker panel at Euroconsult’s World Satellite Business Week, Fred Turpin, managing director at JP Morgan, said that it is currently a very favourable time for FSS operators to tap the high yield bond markets. Turpin said: “I think the market conditions for satellite financing are about as good as they’ve ever been?.
Proceeds from the offering are predominantly to be used to fund a cash tender offer to buy back approximately US$783m of its senior debt. The remainder is to be used for general corporate purposes, including the potential repayment or redemption of the company’s other debt.
Intelsat is seeking to purchase all of subsidiary Intelsat Corp’s outstanding US$658.1m 9.25% senior secured notes, due 2014, and its US$125m 6.875% senior secured debentures, due 2028.
The company is offering holders who validly tender their notes by 29 September a cash consideration of US$1,035 per US$1,000 principal amount of the 2014 notes and US$1,200 per US$1,000 principal amount of the 2028 notes. Those note holders who tender their debt after this date but before the expiration date, currently expected to be 15 October 2010, will receive US$1,005 per US$1,000 principal amount of the 2014 notes and US$1,160 per US$1,000 principal amount of the 2028 notes.
In order to undertake the buy back, Intelsat also needs to secure consent from the note holders to amend certain restrictive covenants and events of default. Credit Suisse is the dealer manager and solicitation agent for the 2014 tender offer and Deutsche Bank dealer manager and solicitation agent for the 2028 tender offer.
