E-mail us: service@prospectnews.com Or call: 212 374 2800
Bank Loans - CLOs - Convertibles - Distressed Debt - Emerging Markets
Green Finance - High Yield - Investment Grade - Liability Management
Preferreds - Private Placements - Structured Products
 
Published on 12/21/2016 in the Prospect News Distressed Debt Daily, Prospect News High Yield Daily and Prospect News Liability Management Daily.

Intelsat details exchange for two series, adds notes-only offer

By Susanna Moon

Chicago, Dec. 21 – Intelsat SA gave an update in the cash and new issue exchange for two series of notes and added a new exchange offer for its 6¾% senior notes due 2018 that consists only of new notes.

In the exchange that began Dec. 8, the company is offering up to $421 million of new 12½% senior notes issued by Intelsat Connect Finance SA and up to $150 million of cash for the 6¾% senior notes due 2018 and the 7¾% notes due 2021 issued by Intelsat (Luxembourg) SA.

In the new exchange, Intelsat’s wholly owned subsidiary Intelsat (Luxembourg) SA is offering to swap out its 6¾% notes for newly issued 12½% senior notes due Nov. 15, 2024 without a cash component, according to a company announcement.

Intelsat will issue $1,000 principal amount of 12½% notes due 2024 for each $1,000 principal amount of 6¾% notes due 2018 tendered for exchange.

The exchange will run until 11:59 p.m. ET on Jan. 19.

Settlement will occur on Jan. 6 for notes tendered by 11:59 p.m. ET on Jan. 4, the early deadline, and on Jan. 20 for all other tenders.

Holders will also receive accrued interest in cash to but excluding the settlement date. Those who tender their notes for exchange after the early deadline will receive on the final settlement date 2024 notes reduced by the amount of interest accrued on the 2024 notes received from the early settlement date to but excluding the final settlement date.

Tendered notes may be withdrawn by the early deadline.

The new notes due 2024 will be callable at par beginning June 1, 2017. Before that, the notes are callable at 101.688% of par.

The new 2024 notes will be Intelsat Luxembourg’s senior unsecured obligations, ranking equally with all of its existing and future senior debt and senior to its existing and future subordinated debt. The 2024 notes will be effectively subordinated to Intelsat Luxembourg’s existing and future secured debt to the extent of the assets securing such secured debt. The 2024 notes will also be structurally subordinated to all of the existing and future liabilities of Intelsat Luxembourg’s subsidiaries, including the liabilities of Intelsat Connect Finance SA to be incurred in connection with the exchange begun on Dec. 7 and the liabilities of Intelsat Jackson Holdings SA under its secured credit agreement and existing notes.

The exchange will preclude holders tendering 2018 notes in the previous exchange.

ICF plans to exchange its $25 million of 2018 notes, along with the additional 2018 notes acquired in the previous exchange and under support agreements announced on Dec. 7. The company expects the 2018 notes acquired by Intelsat Luxembourg to be canceled.

The 2024 notes have not been registered under the Securities Act of 1933.

The exchange is being made only in the United States to holders who are qualified institutional buyers under Rule 144A or those who are not residents in Arkansas who are institutional accredited investors under Regulation D as well as holders outside the United States who are persons not U.S. persons under Regulation S.

Questions about the exchange may be directed to Intelsat Luxembourg at investor.relations@intelsat.com.

Early exchange results

As announced Dec. 8, Intelsat also is offering to exchange the 6¾% senior notes due 2018 and the 7¾% notes due 2021 issued by Intelsat (Luxembourg) SA.

Intelsat previously said it is conducting the offers as part of agreements negotiated with some holders to exchange their notes in private transactions.

In the exchange offers, Intelsat is offering notes and cash as follows:

• $350 of the 12½% notes and $600 cash per $1,000 principal amount for up to $217 million of the $475 million of Intelsat Luxembourg 6¾% notes, excluding $25 million of the notes held by Intelsat Luxembourg; and

• $550 of the 12½% notes and $30 cash per $1,000 principal amount for up to $624 million of the $2 billion of Intelsat Luxembourg 7¾% notes.

Both amounts include an early tender payment of $25 in cash per $1,000 principal amount that will only be paid to those who tender by the early deadline of 11:59 p.m. ET on Dec. 20.

As of 11:59 p.m. ET on Dec. 20, the early offer date, holders had tendered for exchange about $168 million, or 35%, of the 2018 notes and for $878 million, or 44%, of the 2021 notes, according to a separate company update.

The company said it expects to accept all of the 2018 notes on Dec. 22 and some of the 2021 notes using a proration factor of about 71%.

The exchange was set to continue until 11:59 p.m. ET on Jan. 5, but the offer for the 2021 notes has been oversubscribed as of the early deadline.

The company previously said that tenders received before the early deadline would be given priority of acceptance.

Early settlement is planned for Dec. 23 and final settlement for Jan. 10.

The new Intelsat Connect notes will mature on April 1, 2022 and will pay interest semiannually beginning on June 15, 2017.

They will be callable beginning June 1, 2018 at par and will have a make-whole call before that date.

Intelsat Luxembourg created Intelsat Connect for the exchange offers.

A condition to completion of the exchanges is that Intelsat Connect be capitalized with all the equity interests in Intelsat Jackson Holdings SA currently held by Intelsat Luxembourg along with the $25 million of 6¾% notes held by Intelsat Luxembourg and $300 million in cash.

Intelsat Connect will hold tendered notes and use the income from those notes to finance its interest payments.

Intelsat Luxembourg will guarantee the Intelsat Connect notes.

Under the private transactions agreed between Intelsat and some noteholders, those holders agreed to exchange $144 million of the 6¾% notes for $600 in cash and $350 of the new Intelsat Connect notes per $1,000 principal amount of the existing notes. Closing will be simultaneous with early settlement of the exchange offer.

In addition, holders of $67 million of the 6¾% notes agreed to exchange those securities on the same terms.

The second group of holders also agreed to exchange $355 million of the 7¾% notes and $112 million of the 8 1/8% senior notes due 2023 issued by Intelsat Luxembourg at the rate of $550 of new Intelsat Connect notes and $30 in cash per $1,000 principal amount of existing notes. Again, closing will be simultaneous with early settlement of the exchange offer.

The exchange offers are being carried out under Rule 144A, Regulation D and Regulation S.

Global Bondholder Services Corp. (212 430-3774, 866 470-4200 or http://gbsc-usa.com/eligibility/intelsat) is information agent and exchange agent.

Intelsat is a Luxembourg-based communications satellite company.


© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.