Intelsat and Eutelsat both tap bonds
June 7, 2019
By Chris Forrester
There must have been something in the air for two satellite giants to tap the bond markets for extra funding on the same day, June 6th.
Intelsat raised a total of $400 million (priced at 9.75 per cent, and due for repayment in 2025) which was $100 million more than they had announced earlier. Intelsat will use the cash for “working capital” and general corporate purposes.
Meanwhile, Eutelsat issued an 8-year Eurobond valued at €600 million, and which will be used to pay down existing debt.
However, there’s a huge difference in the interest rate costs. Eutelsat’s interest rate is just 2.25 per cent (and the debt is due for repayment in July 2027).
Eutelsat is also to benefit by using the cash to repay existing debt and will save some €10 million annually in interest payments. Eutelsat says it has taken advantage of the current competitive market environment to raise long-term financing with a 8-year maturity on attractive terms. “The transaction was well received by a diversified investor base, demonstrating the market’s confidence in Eutelsat’s long-term business model,” said the operator.