California-based Viasat has some inevitable anxieties about the current Covid-19 pandemic and the impact it is having on its aircraft-based In-Flight Communications and Entertainment revenues.
It is borrowing $400 million (via Senior Unsecured Notes due 2028) in a private placing.
Viasat says it intends to use the net proceeds from the offering to repay all of its outstanding borrowings under its existing revolving credit facility and for general corporate purposes, which may include financing costs related to the purchase, launch and operation of satellites, potential acquisitions, joint ventures and strategic alliances, working capital or capital expenditures.
Ratings agency Fitch has affirmed Viasat’s overall debt at “B+” and “BB-“ for the latest batch of $400 million and issued an outlook view as “Positive”. Fitch says it bases its rating on the current funding of its next-generation ‘Class-3’ satellites, two of which are expected to be launched by the middle and end of 2021.
“The major boost in capacity provided by these satellites should lead to a slower rate of deployment of satellites in future years, leading to improved Free Cash Flow,” says Fitch.
Viasat is already busy supplying broadband to 590,000 US consumers, and is connecting Brazilian users with 11,000 sites in Brazil via 9000 schools and 2.4 million students. Its US ARPU’s are impressive at $93 per month. It is also – in normal times – serving 1390 aircraft with broadband and in-flight connectivity.