S&P assigns B- to Intelsat notes

S&P said it assigned its B- issue-level rating and 1 recovery rating to Intelsat SA's proposed $490 million 9½% senior secured notes due 2022.

The 1 recovery rating indicates an expectation for very high (90%-100%) recovery of principal in the event of a payment default.

The company plans to use the proceeds to fund its previously announced tender offer.

The CC issue-level rating on Intelsat Jackson Holdings SA's 5½% senior notes due 2023 and 7½% senior notes due 2021 remains unchanged. This debt is subject to the announced tender offer and will likely be repurchased at a significant discount to par. S&P expects to lower this rating to D if and when the tender of this debt is completed.

The D issue-level rating on Intelsat's 6 5/8% senior notes remains unchanged, as it is also subject to the announced tender offer. The agency revised this rating to D from CC upon Intelsat's repurchase of $460 million in face value at a material discount to par in May.

Intelsat’s corporate credit rating remains SD. S&P said it plans to raise it as soon as possible, most likely after the tender offer is completed, to a level that will reflect the ongoing risk of a conventional default or future distressed restructurings.

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