[Satellite TODAY Insider 01-13-11] Intelsat S.A. has borrowed $3.75 billion from a consortium of banks and securities in an effort to reorganize its assets and simplify operations, the operator announced Jan. 12.
    Bank of America, Merrill Lynch, Credit Suisse Securities USA, J.P. Morgan Securities, Barclays Capital, Deutsche Bank Securities, Morgan Stanley and UBS Securities issued Intelsat a $3.25 billion loan with a revolving credit facility of up to $500 million, with Goldman Sachs, RBC Capital Markets and HSBC acting as co-managers on the financing.
    As a result of the loan, Intelsat will cease filing annual and quarterly periodic reports with the U.S. Securities and Exchange Commission (SEC), effective immediately.
    A majority of the proceeds will be loaned to Intelsat Corp. to repay all of its existing senior secured credit facilities, including about $1.8 billion of term loans, and to redeem all of the operator’s $580.7 million aggregate senior debt due in 2016. Intelsat also plans to completely pay off its $111.8 million in senior notes due in 2014. In addition, approximately $330.2 million of the net proceeds will be diverted to subsidiary Intelsat Holding Co. to repay its existing debt and senior secured credit facilities.
    Morgan Stanley Managing Director James Murray hinted that this kind of deal was on the way in a Via Satellite interview earlier this month. Murray said FSS operators present an “historic” opportunity to access debt capital with the most attractive absolute rates seen in a generation. “The high-yield market is actually stronger than it was in the early fall. It is hard to say how long this window will remain open, but issuers and underwriters remain optimistic, and the backlog of offerings is large,” he said. “If you look at the FSS sector, these companies have strong businesses, predictable revenues and visible backlog — all of which the credit markets like. North American FSS players were so highly levered over the last three years. Even though  Telesat and Intelsat were once levered at 8 times EBITDA, the businesses performed just fine with very high levels of leverage. Now that the markets are better, debt investors feel even better about these businesses.”

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