Moody's rates Telesat Canada notes Caa1

Moody's Investors Service said it assigned an SGL-3 speculative-grade liquidity rating to Telesat Canada, a Caa1 (LGD5, 82%) rating to its new $693 million senior unsecured bonds and a Caa1 (LGD6, 95%) rating to its $217 million senior subordinated notes. The agency also affirmed the company's B2 corporate family rating, affirmed its senior secured bank credit facility at B1 (LGD3) and changed the credit facility's loss-given-default rate to 33% from 32%.

The outlook is stable.

The new notes will replace an equivalently sized existing bridge loan. The agency said that because the transaction merely substitutes one source of funding with a similarly sized and structured instrument, the transaction has no impact on Telesat's corporate family rating.

In addition, because the company's financing arrangements accommodate the deterioration in credit protection measures and the concomitant delay in credit metric normalization stemming from the delayed launch of Telesat's Nimiq-4 satellite, near-term default risk remains broadly consistent with that as assessed last October when the company's ratings were assigned, Moody's said.

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