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S&P upgrades Intelsat, rates Intelsat Jackson notes CCC+
S&P said it raised its corporate credit rating on Intelsat SA to CCC+ from SD. The outlook is stable.
At the same time, S&P raised the issue-level rating on Intelsat Jackson Holdings SA's secured debt to B from B-. The recovery rating remains 1, indicating an expectation for very high (90%-100%; rounded estimate: 95%) recovery for lenders in the event of a payment default.
S&P also raised the issue-level rating on Intelsat Jackson Holdings’ unsecured debt to CCC+ from CC and revised the recovery rating to 3 from 4. The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 50%) recovery for lenders in the event of a payment default.
S&P said it raised the issue-level rating on Intelsat Connect Finance SA's unsecured debt to CCC- from CC. The agency also raised the issue-level rating on Intelsat (Luxembourg) SA's senior unsecured notes due 2018 to CCC- from CC and raised the rating on the rest of its unsecured debt to CCC- from D. The recovery rating remains 6, indicating an expectation for meaningful (0%-10%; rounded estimate: 0%) recovery for lenders in the event of a payment default.
Additionally, S&P said it assigned a CCC+ issue-level rating and 3 recovery rating to Intelsat Jackson Holdings' proposed $1.5 billion senior unsecured notes due 2025. The company plans to use the proceeds from the notes issuance to repay its $1.5 billion 7¼% senior unsecured notes due 2019.
“The upgrade follows our review of Intelsat following the termination of its combination agreement with OneWeb,” said S&P credit analyst Rose Askinazi in a news release.
The merger was contingent on a series of debt exchange offers that were not completed. S&P said it had considered the potential repurchase of existing notes at a material discount to par as a distressed restructuring and tantamount to default.
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