Intelsat units to exchange several note series related to merger plans

By Susanna Moon

Chicago, Feb. 28 – Intelsat SA announced exchange offers and consent solicitations for several series of notes to be conducted by indirect wholly owned subsidiaries Intelsat Jackson Holdings SA, Intelsat Connect Finance SA and Intelsat (Luxembourg) SA.

The offers are being planned for a merger agreement with WorldVu Satellites Ltd., in which OneWeb will combine with Intelsat.

The exchange notes will be mandatorily exchanged at a discount for final Jax notes, newly issued common shares of Intelsat and/or cash on the closing date of the merger, according to a company announcement.

While the exchange is expected to close before the merger, the exchange is contingent on and will occur automatically and mandatorily upon closing of the merger.

The aggregate cash paid in the exchange offers upon the mandatory exchange will be about $1.7 billion.

The exchange requires the tender of a minimum of 85% of the principal amount of each series of notes.

Intelsat Jackson exchange

In the exchange, Intelsat Jackson plans to offer $1,000 principal amount of new exchange notes for each $1,000 principal amount tendered, as follows:

• 7¼% mandatorily exchangeable senior notes due 2019 for its 7¼% senior notes due 2019;

• 7¼% mandatorily exchangeable senior notes due 2020 for its 7¼% senior notes due 2020;

• 7½% mandatorily exchangeable senior notes due 2021 for its 7½% senior notes due 2021; and

• 5½% mandatorily exchangeable senior notes due 2023 for its 5½% senior notes due 2023.

Before the merger closing date, the exchange notes will have substantially identical terms to the corresponding series of existing notes.

Upon closing of the merger, the notes will (i) for the portion of the principal amount, become automatically due and payable in cash; and (ii) for the remainder, be automatically and mandatorily exchanged into new unsecured five-year senior notes or new unsecured seven-year senior notes.

Specifically, when the merger closes, noteholders will receive the following for each $1,000 principal amount:

• For the notes due 2019, a total exchange value of $940.00 consisting of $45.65 to $90.20 in cash and $849.80 to $894.35 principal amount of 6¾% five-year notes;

• For the notes due 2020, a total exchange value of $880.00 consisting of $45.65 to $90.20 in cash and $789.80 to $834.35 principal amount of 6¾% five-year notes;

• For the notes due 2021, a total exchange value of $860.00 consisting of $45.65 to $90.20 in cash and $769.80 to $814.35 principal amount of 7¼% seven-year notes; and

• For the notes due 2023, a total exchange value of $760.00 consisting of $45.65 to $90.20 in cash and $669.80 to $714.35 principal amount of 7¼% seven-year notes.

Holders also will receive accrued interest.

The five-year notes will be redeemable before the second anniversary of the merger under a make-whole provision and after that using a call schedule.

The seven-year notes will be callable before the third anniversary of the merger using a make-whole provision and after that using a call schedule.

ICF, Lux exchange

Intelsat Connect will offer to exchange new 12½% mandatorily exchangeable senior notes due 2022 for its 12½% senior notes due 2022.

Intelsat Luxembourg is planning to exchange the following:

• 7¾% mandatorily exchangeable senior notes due 2021 for its 7¾% senior notes due 2021; and

• 8 1/8% mandatorily exchangeable senior notes due 2023 for its 8 1/8% senior notes due 2023.

Before the merger closing date, the exchange notes will have substantially identical terms to the corresponding series of existing notes.

When the merger closes, the notes will (i) for the portion of the principal amount, become automatically due and payable in cash; and (ii) for the remainder, be automatically and mandatorily exchanged into a number of newly issued common shares of Intelsat, valued at $5.00 per share.

Specifically, holders will receive the following for each $1,000 principal amount:

• For the ICF notes, a total exchange value of $780.00 consisting of $768.00 in cash and $12.00 new common shares.

• For the 2021 notes, a total exchange value of $460.00 consisting of $448.00 in cash and $12.00 new common shares.

• For the 2023 notes, a total exchange value of $460.00 consisting of $448.00 in cash and $12.00 new common shares.

The amount of shares assumes a value of $5.00 per share, which is the subscription price for common shares of Intelsat being purchased by SoftBank Group Corp. in connection with the merger, the release noted.

Holders also will pay accrued interest.

Consent solicitations

The issuers also will solicit consents to amend the note indentures, which require the approval of a majority of the outstanding principal amount of each series of notes, to eliminate substantially all of the restrictive covenants, to modify or eliminate other provisions and to waive any past defaults.

The exchange offers will be made only to qualified institutional buyers under Rule 144A, to institutional investors under Regulation D or to non-U.S. persons under Regulation S.

Intelsat is a Luxembourg-based communications satellite company.

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