Fitch places Viasat on watch

Fitch Ratings said it placed the BB- long-term issuer default ratings of Viasat, Inc. and Viasat Technologies Ltd. on rating watch negative. Fitch has also placed the BB- IDRs of Connect BidCo Ltd., and co-borrowers –– Connect Finco Sarl and Connect U.S. Finco LLC –– on RWN. All issue ratings have also been placed on RWN.

“The rating action follows the announcement of an unexpected event resulting from a problem in reflector deployment of the recently launched Viasat-3 Americas satellite. The company is investigating the issue; however, there is a potential total loss of the first satellite (subject to recovery under insurance claims) and a delay in the launch of the second Viasat-3 satellite as it uses the same reflector. While the existing customers, coverage and capacity are not affected, Fitch believes there could be a potential impact on future revenue growth especially in U.S. Fixed broadband segment,” the agency said in a press release.

Fitch said it estimates the satellite cost Viasat about $800 million and through insurance it should recoup $425 million if there is a total loss. “Fitch expects entire proceeds to be utilized for the company's capex.”

More details should be forthcoming at Viasat’s Aug.9 earnings call, the agency said.

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