Moody's upgrades Intelsat

Moody's Investors Service said it upgraded Intelsat Investments SA's corporate family rating to B3 from Caa1 and probability of default rating to B3-PD from Caa1-PD.

The agency also upgraded its senior unsecured regular bond/debenture to Caa2 (LGD 6, 96%) from Caa3 (LGD 6, 96%), along with Intelsat (Luxembourg) SA's senior unsecured regular bond/debenture to Caa2 (LGD 5, 87%) from Caa3 (LGD 5, 86%) and Intelsat Jackson Holdings SA's senior secured bank credit facility to Ba3 (LGD 1, 7%) from B1 (LGD 1, 7%) and senior unsecured regular bond/debenture to Caa1 (LGD 5, 71%) from Caa2 (LGD 5, 70%).

The agency also confirmed its senior unsecured regular bond/debenture at B3 with its loss-given-default rating revised to LGD 3, 44% from LGD 3, 43%.

The company's speculative-grade liquidity rating was affirmed at SGL-2 (good).

The upgrades conclude a review that began April 2 when Intelsat's indirect ultimate parent company, Intelsat SA, announced an equity issue with most of the proceeds reducing debt at Intelsat and its subsidiaries, Moody's said.

The outlook was changed to stable.

The upgrades reflect expectations that Intelsat's capital structure will be sustainable as a consequence of modest, positive cash flow resulting from refinancing debt at historically low interest rates, the agency said.

The upgrade was limited to one notch since Intelsat continues to be highly levered at 7.8x and has limited capacity to repay debt, Moody's said.

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