Moody's trims Telesat

Moody's Investors Service said it downgraded Telesat Canada's corporate family rating to Caa1 from B3, probability of default rating to Caa2-PD from B3-PD, senior secured credit facilities and senior secured notes ratings to B3 from B2 and senior unsecured notes rating to Caa3 from Caa2. The agency raised the company's speculative grade liquidity rating to SGL-1 from SGL-2 and the outlook remains negative.

Concurrently, Moody's assigned a Caa1 CFR, Caa2-PD PDR, SGL-1 rating and a negative outlook to Telesat Canada's parent, Telesat Corp. and will withdraw the CFR, PDR and SGL rating at Telesat Canada.

Telesat Canada is the main operating company but does not file financial statements, so the agency uses Telesat Corp.'s financial statements to evaluate the company; so it reassigned the CFR, PDR and SGL rating to Telesat Corp.

"The one-notch downgrade of the CFR reflects the company's rising financial leverage while the two-notch downgrade of the PDR reflects the heightened probability of a debt restructuring," said Peter Adu, a Moody's vice president and senior credit officer, in a press release.

"The liquidity rating improved because the company is building cash with the significant delay in the LEO project," Adu added.

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