Report: Satmex Seeking 12 Percent Yield on Bankruptcy Bonds

[Satellite TODAY Insider 04-20-11] Investors who prearranged Satelites Mexicanos’ (Satmex) entrance into U.S. bankruptcy protection earlier this month will demand a yield of up to 12 percent on Satmex’s overseas bonds, Federated Investment Management Co. spokesman Roberto Sanchez-Dahl announced in a report released April 19.
    The proposed yield is higher than current average corporate dollar borrowing rates of 6.29 percent and represents the highest for a Mexican company since Servicios Corporativos Javer SAPI paid 13 percent in July 2009, according to the report.
    Satmex hopes to sell the $325 million, five-year bonds to exit out of its second bankruptcy since 2006, launch a satellite in 2012 and repay creditors as part of a U.S. bankruptcy court-approved restructuring plan. The capacity provider’s creditors approved Satmex’s debt sale and an equity offering of the reorganized equity of about $96.25 million as part of the pre-approved restructuring.
    Earlier this year, the Mexican government sold its stake in Satmex and said it would hire Boeing, Loral Space & Communications or Thales Alenia Space to build two satellites for its new space agency. To avoid bankruptcy, Satmex made efforts to sell itself to EchoStar but was unsuccessful.
    Satmex has $441.6 million in assets and $531.6 million of debt, according to Chapter 11 documents filed with the U.S. Bankruptcy Court in Delaware. The assets are comprised mostly of the value of the orbital slots assigned to the company.
    In the report, Sanchez-Dahl said that while Satmex hopes its orbital slots will generate interest in its assets, buyers have noticed that most of Satmex’s customers have moved to competitors. "Right now they can’t generate enough revenue or EBITDA to cover this. We got out of the bonds because the situation is just too complicated," he said.

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Report: Satmex Seeking 12 Percent Yield on Bankruptcy Bonds

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