Intelsat filed a statement with the Securities & Exchange Commission (SEC) on April 15th which, in essence, said that it was withholding a $125 million interest payment due on its Intelsat Jackson Holdings subsidiary due April 15th.
The payment was due in regard to Intelsat’s 8.5 percent Senior Notes borrowing due for repayment in 2024.
The news sent Intelsat’s already depressed shares spiralling down further. April 15th saw its shares touch just 93 cents at one point although finishing the day at $1.02.
Under the terms of the borrowing Intelsat is allowed a 30-day grace period to make the payments before such non-payment constitutes an ‘event of default’ with respect to the 2024 Senior Notes.
The SEC statement added: “Intelsat Jackson has elected to enter into the 30-day grace period with respect to the Interest Payment in order to increase its financial flexibility as it assesses the Company’s operating and general economic environment.”