PanAmSat sets pricing in note tender

New York, Aug. 6 - PanAmSat Corp. said it has set tentative pricing in its cash tender offer for its $800 million principal amount of 8½% senior notes due 2012 and $275 million principal amount of 6 1/8% notes due 2005 and a consent solicitation for the 8½% notes.

If the offers ends on Aug. 20 as scheduled, PanAmSat will pay $1,164.20 per $1,000 principal amount for the 8½% notes and $1,015.63 per $1,000 principal amount for the 6 1/8% notes. It will also pay accrued interest up to but not including the settlement date.

If the tender is extended for more than 10 business days then a new pricing date will be fixed. For an extension of less than 10 business days a new pricing date may be set. If it is, then it will be between two and 10 business days before the new expiration.

The offer is subject to conditions including all conditions to the sale of PanAmSat to affiliates of Kohlberg Kravis Roberts & Co. LP, The Carlyle Group and Providence Equity Partners Inc. As previously announced, the propulsion system failure on the company's Galaxy 10R satellite allows the purchasers to not complete the acquisition.

The prices fixed include a $20 per $1,000 principal amount consent payment for the 8½% notes and a $20 per $1,000 principal amount early tender premium for the 6 1/8% notes. All holders who tender before the expiration date will receive these amounts.

On July 28 PanAmSat said it received consents and tenders of more than 91% of its 6 1/8% notes due 2005 by the early tender deadline and more than 99% of its 8½% senior notes due 2012 by the consent deadline. Both deadlines were 5 p.m. ET on July 27.

PanAmSat also said it is extending the expiration of the tender to 5 p.m. ET on Aug. 18 and will pay the early tender premium on the 6 1/8% notes and the consent payment on the 8½% notes to all holders who tender by that date.

The offer was previously due to expire at 5 p.m. ET on Aug. 13.

The price determination date for the offers will still be the 10th business day before the expiration, putting it at Aug. 4.

PanAmSat said on July 14 it had begun a tender offer for its $800 million principal amount of 8½% senior notes due 2012 and $275 million principal amount of 6 1/8% notes due 2005 and a consent solicitation for the 8½% notes.

The price for the 8½% notes will be set as the present value on the settlement date of the $1,042.50 redemption price on their first call date of Feb. 1, 2007 plus accrued interest through that period.

The discount rate will be set as 50 basis points over the yield to maturity of the 2.25% U.S. Treasury note due Feb. 15, 2007. Accrued interest up to the settlement date will be subtracted. Pricing will be set at 2 p.m. ET on the 10th business day before the expiration.

The total includes a $20 per $1,000 consent payment that will only be paid to holders who tender and deliver consents by the consent deadline of 5 p.m. ET on July 27.

The consent solicitation is to amend the indenture to eliminate most of the restrictive covenants and certain other provisions.

Adoption of the proposed amendments requires the consent of holders of at least a majority of the principal amount of the notes outstanding.

Holders who tender must deliver consents, and consents cannot be delivered without tenders.

The offer is subject to at least a majority of the notes being tendered, the receipt of the necessary consents and other conditions.

For the 6 1/8% notes, PanAmSat will pay a price equal to the present value on the settlement date of the notes' $1,000 value at maturity on Jan. 15, 2005 plus accrued interest through that period, discounted using a yield of 50 basis points over the yield to maturity of the 1.75% U.S. Treasury note due Dec. 31. Accrued interest up to the settlement date will be subtracted. Pricing will be set at 2 p.m. ET on the 10th business day before the expiration.

The total includes a $20 per $1,000 early tender payment that will only be paid to holders who tender by 5 p.m. ET on July 27.

Citigroup Global Markets Inc. (800 558-3745 or call collect 212 723-6106) is dealer manager and solicitation agent. The information agent is Global Bondholder Services Corp. (866 952-2200 and 212 430-3774).

The Wilton, Conn., satellite operator is carrying out the tender as part of its sale to affiliates of Kohlberg Kravis Roberts & Co., The Carlyle Group and Providence Equity Partners Inc.

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