Moody's changes Intelsat view to developing

Moody's Investors Service said it affirmed Intelsat Ltd.'s ratings and changed the outlook for all ratings to developing from negative following the company's announcement that it is acquiring PanAmSat for $3.2 billion plus the assumption of PanAmSat's $3.2 billion debt.

The company's B2 corporate family rating was affirmed. Also affirmed were the $400 million 5.25% global notes due 2008 at Caa1 and the $600 million 7.625% senior notes due 2012 at Caa1 as well as the $700 million 6.5% global notes due 2013 at Caa1.

Also affirmed were Intelsat Subsidiary Holding Co. Ltd.'s $300 million senior secured revolver due 2011 at B1, its $350 million senior secured term loan B due 2011 at B1, its $1 billion senior floating-rate notes due 2012 at B2, its $875 million 8.25% senior notes due 2013 at B2 and the company's $675 million 8.625% senior notes due 2015 at B2.

Also, Intelsat (Bermuda) Ltd.'s $478.7 million senior unsecured discount notes due 2015 were affirmed at B3.

Moody's expects the transaction to be largely, if not entirely, financed with new debt and that it will significantly increase Intelsat's pro forma leverage thereby increasing credit risk for Intelsat debt holders and pressuring the rating downwards.

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