Intelsat upsizes note offering to $3.5 billion, adds two tranches

By Paul A. Harris

Portland, Ore., March 20 - Intelsat (Luxembourg) SA, a subsidiary of Intelsat SA, upsized its senior note offering to $3.5 billion from $1.5 billion and added two tranches of notes on Wednesday, according to a market source.

The massively upsized and revised deal includes a $500 million tranche of five-year notes, non-callable for two years, which is talked at 6¾%, a $2 billion tranche of eight-year notes, non-callable for four years, talked at 7¾%, and a $1 billion tranche of 10-year notes, non-callable for five years, talked at 8 1/8%.

The deal was announced late Tuesday as a single $1.5 billion tranche of eight-year notes talked at 7¾%.

Terms were expected on Wednesday; however, they were unavailable at press time, market sources said.

Goldman Sachs & Co., Morgan Stanley & Co. LLC 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, as well as 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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