Satellite giant Intelsat has started its debt restructuring process. It announced May 12th that it would start a tender offer for many of its already issued Senior Notes. The offer period will close on June 9th unless extended ahead of time or terminated because the securities have been sold.
In essence Intelsat is proposing restructuring a trio of its existing Notes and is proposing to Note-holders between $710 and $755 per $1000 of debt up to a maximum of $625 million. In March Intelsat issued a fresh Senior Note worth $1.25 billion, at an 8 per cent rate of interest and due for redemption in 2024.
Because Intelsat’s Notes have been trading at a significant discount (one batch at $650/1000) over the past few months the Note-holders might well make a useful profit.
The end result could see Intelsat reduce its debt and interest payment obligations. However, the various Ratings Agencies might view the process as being negative although Intelsat insiders strongly insist that the whole exercise is part of their overall debt restructuring plan, and extending the maturity on the company’s loans. Intelsat’s current debt obligations total some $15.9 billion.
Guggenheim Securities was appointed on February 22nd to advise Intelsat on the financial restructuring.
Last year Intelsat generated overall revenues of $2.35 billion. It paid a total of $890 million in interest payments last year.