Moody’s eyes Telesat for downgrade

Moody’s Investor’s Service said it placed Telesat Canada’s B1 corporate family rating, B1-PD probability of default rating, Ba3 ratings on its senior secured credit facilities and senior secured notes and B3 rating on its senior unsecured notes on review for downgrade. The company’s speculative grade liquidity rating was unchanged at SGL-2.

The rating action follows the company’s announcement it selected Thales Alenia Space as the contractor for its planned low earth orbit (LEO) constellation of 298 satellites and integrated ground network that is expected to cost about $5 billion. The signing of the contract is conditional on the availability of funding, Moody’s said.

“The review for downgrade was prompted by the possibility that Telesat’s leverage will increase materially over the construction phase of the LEO constellation,” said Peter Adu, a Moody’s vice president and senior analyst, in a press release.

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