Intelsat's $3.2 billion acquisition of PanAmSat likely to result in new bonds, market source says

By Paul A. Harris

St. Louis, Aug. 29 - Intelsat Ltd.'s $3.2 billion acquisition of PanAmSat Holding Corp. is likely to produce new issuance of high-yield bonds, according to a market source.

Financing for the deal, announced Monday, is being provided by Deutsche Bank, Citigroup, Credit Suisse First Boston and Lehman Brothers.

The source said that Intelsat would likely have to take out some of PanAmSat's senior notes due Aug. 15, 2014. PanAmSat priced slightly more than $1 billion of the notes at par in July 2004. The source also said that Intelsat would likely have to take out some of PanAmSat's 0% senior discount notes due Nov. 1, 2014, of which PanAmSat priced $416 million in September 2004.

The source said that all the bonds of both entities traded off on Monday, with PanAmSat's bonds faring slightly worse.

"They had been off as much as 2 to 3 points and closed the day off a point and a half," the source said.

The combined entities of Intelsat and PanAmSat would form the world's largest commercial satellite operator.

PanAmSat is a Wilton, Conn.-based satellite network operator.

Intelsat is a Pembroke, Bermuda, satellite communications company.

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