Intelsat $1.5 billion eight-year notes talked to yield in 7¾% area

By Paul A. Harris

Portland, Ore., March 20 - Intelsat (Luxembourg) SA, a subsidiary of Intelsat SA, talked its $1.5 billion offering of eight-year senior notes (/CCC+/) to yield in the 7¾% area on Wednesday morning, according to a trader.

The offer, which dealers unveiled late Tuesday, is a blowout, the trader said, adding that the deal size could grow.

Pricing is set for later in the Wednesday session.

Goldman Sachs & Co., Morgan Stanley & Co. and J.P. Morgan Securities LLC are the joint bookrunners.

The Rule 144A and Regulation S notes come with four years of call protection.

Proceeds will be used to redeem $915 million of the company's 11½%/12½% senior PIK election notes due 2017, to redeem an additional $460 million of its 2017 PIK notes and for general corporate purposes, which may include the repayment, redemption, retirement or repurchase of additional 2017 PIK notes or other outstanding debt of Intelsat Luxembourg and its subsidiaries.

The prospective issuer is a Luxembourg-based satellite services provider.

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