Intelsat talks $300 million seven-year convertibles to yield 4.75% to 5.25%, up 17.5% to 22.5%

By Abigail W. Adams

Portland, Me., June 11 – Intelsat SA plans to price $300 million of seven-year convertible notes after the market close on Monday with price talk for a coupon of 4.75% to 5.25% and an initial conversion premium of 17.5% to 22.5%, according to a market source.

Morgan Stanley & Co. Inc. is bookrunner for the Rule 144A deal, which carries a greenshoe of $45 million.

The notes are non-callable for four years then may be redeemed subject to a 130% hurdle with a make-whole.

The convertible notes are being offered concurrently with a $200 million common share offering, which carries a greenshoe of $30 million.

Morgan Stanley and Goldman Sachs & Co. LLC are joint bookrunners for the common stock offering.

The convertible notes will be guaranteed by Intelsat Envision Holdings LLC, a new subsidiary of Intelsat (Luxembourg) SA that will become the parent company of Intelsat Connect Finance SA, according to a company news release.

Proceeds will be used to purchase Intelsat Luxembourg’s 7¾% senior notes due 2021 through a tender offer or open market purchases.

Intelsat is a Luxembourg-based communications satellite services provider.

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