Intelsat/PanAmSat set price talk, amendment fees

By Sara Rosenberg

New York, Jan. 22 - More details emerged on the Intelsat Ltd./PanAmSat Holding Corp. amendment on Tuesday as a call was held to discuss the transaction, including pricing information and amendment fees, according to a market source.

The call was for investors only. The company wasn't involved in the call.

As was previously reported, the purpose of the amendment is to allow the credit facilities to remain in place following the purchase of Intelsat, which merged with PanAmSat in 2006, by BC Partners.

Under the amendment, pricing on Intelsat's secured bank debt will be increased to Libor plus 250 basis points from current pricing of Libor plus 200 bps.

Pricing on PanAmSat's secured bank debt, including the $150 million term loan that was launched last week, will be priced initially at Libor plus 250 bps, but can range anywhere from Libor plus 250 bps to 287.5 bps based on a leverage grid, compared to current pricing of Libor plus 200 bps. The new term loan is being used to redeem a $150 million issue of 6 3/8% senior notes.

Also under the amendment, Intelsat's term loan will be non-callable for two years and PanAmSat's term loan will be divided into a term loan B-1 that is callable at par, a term loan B-2 that has call protection of 102 in year one and 101 in year two, and a term loan B-3 that is non-callable for one year, then at 102 in year two and 101 in year three.

In addition, the amendment would reduce the size of Intelsat's revolver by $50 million and PanAmSat's revolver by $75 million.

Lastly, senior secured leverage ratios will be added to the covenant-light term loans, with Intelsat getting a 1.5 times test and PanAmSat getting a 4.5 times test.

The first 50.1% of lenders to approve the amendment will get paid a fee of 500 bps. The remainder will get paid a fee of 100 bps.

Credit Suisse, Bank of America and Morgan Stanley are the lead banks on the deal.

Through this amendment, Credit Suisse will be taking over the role of administrative agent from Citigroup, although Citi was the one who organized Tuesday's call.

BC Partners is buying about 76% of the primary ownership of Intelsat. The current shareholders of Intelsat, including funds advised by Apax Partners, Apollo Management, Madison Dearborn Partners, Permira and management, are expected to receive upon closing $4.6 billion in cash, and will continue to hold about 24% of the primary ownership in the company.

Intelsat is a Pembroke, Bermuda, satellite company.

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