Intelsat gets approval of $1.5 billion replacement DIP facility

By Sarah Lizee

Olympia, Wash., Sept. 13 – Intelsat SA secured court approval to enter into a $1.5 billion replacement debtor-in-possession facility, according to a minute entry filed Monday with the U.S. Bankruptcy Court for the Eastern District of Virginia.

As previously reported, the company filed an amended plan support agreement that is supported by holders of about $11 billion in claims, representing nearly 75% of the debtors’ outstanding pre-petition debt across their capital structure.

The company said this is a pivotal moment in these cases and lays the groundwork for a comprehensive restructuring that would reduce the debtor’s funded debt obligations by about $8 billion and position the company for long-term success.

Simultaneously, Intelsat has completed much of the work required to clear the C-band spectrum and receive the first of the two accelerated relocation payments provided for under the Federal Communications Commission order, amounting to about $1.2 billion.

“In spite of these significant achievements, however, the FCC-directed reimbursement process for the costs and expenses of clearing the C-band spectrum has not proceeded on the expected timeline,” the company said.

“The debtors therefore require incremental liquidity in the lead up to confirmation.”

The debtors engaged with their existing DIP lenders to access additional capital to provide the liquidity and flexibility to continue clearing the C-band spectrum in line with the timeline under the FCC order and for the benefit of the debtors’ stakeholders.

The replacement DIP facility will refinance the existing DIP facility and provide an additional $500 million of liquidity to further facilitate the debtors’ clearing of C-band spectrum in light of the revised timing forecast for reimbursement of the debtors’ clearing costs.

As of Aug. 30, the debtors had drawn the entire $1 billion available under their existing DIP facility.

The replacement facility consists of a $1.25 million term loan facility and a $250 million delayed-draw term loan.

The scheduled maturity date, July 13, 2022, may be extended by up to three months if needed.

The replacement facility also includes a lower interest rate, at Libor plus 475 basis points per year with a 1% Libor floor.

Intelsat is a Luxembourg-based satellite telecommunications company. The company filed bankruptcy on May 14, 2020 under Chapter 11 case number 20-32299.

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