Telesat plans to sell $750 million eight-year senior notes; proceeds for debt repayment, dividend

By Paul Deckelman

New York, Nov. 2 – Telesat Canada announced plans on Wednesday to sell $750 million of senior notes due 2024, along with co-issuer Telesat LLC.

The proposed notes would be sold under Rule 144A and Regulation S.

The timing of the planned offering and the investment banks participating in the transaction have not been announced yet.

Telesat Canada – a wholly owned subsidiary of Telesat Holdings Inc., an Ottawa-based global communications satellite operator – plans to use the anticipated net proceeds from the bond deal, and from a planned $2.18 billion term loan borrowing that it is concurrently arranging as part of a new credit facility, primarily for debt repayment.

The issuer will use those bond-deal and term-loan proceeds, plus cash on hand, to redeem its $900 million of outstanding 6% senior notes due May 15, 2017 and to repay all borrowings outstanding under its existing credit facilities.

Telesat also plans to use some of those proceeds to pay related fees and expenses and to fund its previously announced cash dividend to its shareholders.

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