Morgan Stanley: ‘Intelsat shares $1’
March 23, 2016
By Chris Forrester
Investment bankers Morgan Stanley is slashing its share price target for satellite operator Intelsat to just $1 (from its earlier target of $5) and a 64 per cent discount to the operator’s closing price on March 21st.
Morgan Stanley is maintaining its “Underweight” rating to investors. Intelsat’s share price has tumbled some 72 per cent since mid-August 2015.
Intelsat’s share price fell back another 9.96 per cent on March 22nd to $2.53 (although it hit $2.43 at one point). Last year its share price stood at $17.43.
On March 21st Intelsat announced that it had raised $1.25 billion in fresh debt. Bloomberg says this gives the company “more time while it tries to cut its total annual interest payments”. Intelsat now has more than $15 billion of borrowings. Its debt repayments are some $900 million annually, although it has also to pay off a previous debt obligation of more than $400 million during 2018.
Bloomberg says that as Intelsat’s shares have fallen those of its rivals SES and Eutelsat, while weaker, have remained stable.