Intelsat Unit Lowers Price on $625 Million Bond-Buyback Offerby
Intelsat will still spend up to $625 million buying back the notes, offering between 65.75 cents to 68.5 cents on the dollar, down from a range of 71 cents to 75.5 cents the satellite company announced on May 12. It plans to issue new debt to fund the buyback.
“The company is seemingly trying to capture more discount,” Creditsights Inc. analyst Lindsay Pacia wrote in a research report Wednesday. The bonds had traded down since the tender offer was first launched last week amid warnings of a tougher outlook for the industry from rival Eutelsat Communications SA.
Intelsat Jackson Holdings is looking to repurchase its 6.625 percent senior unsecured notes due in 2022, 5.5 percent senior unsecured notes due 2023 and 7.5 percent senior notes due 2021.
The offer expires on June 14, the company said. Noteholders who sell the debt by May 31 will receive a premium of $20 per each $1,000 of principal they tender, according to the statement.
The announcement comes after hedge fund investor Aurelius Capital Management sent a letter to Intelsat last week saying the company is in default after one of its units borrowed cash to fund a dividend and pushed its leverage ratio beyond its threshold.