SES / Intelsat - comment

To follow up on yesterday’s call, we have corrected the coupon and maturity for the existing Intlesat bond, where we have had erroneous information in the capital structure. Intelsat’s SSNs are 6.5% 2030s.
As regards the justified question of why SES wouldn’t want to keep those bonds in place since they are long-dated and not expensive, note that we do not have the indenture, but we think the answer is two-fold:

1) SES will be looking to integrate Intelsat’s operations into its own, as evidenced by the 15% synergy ambitions. Moreover, suppose the Intelsat Government operation has to be split off. In that case, we suspect this will temper with the SSN’s security package to a point where it must be refinanced anyway.

2) SES has a clean IG structure in place, which it would do well to preserve. Refinancing maturing MTNs while half the business is subject to a secured bond could become more difficult.

We are in the process of editing the SES/Intelsat Live Discussion for publication on the website. In the meantime, you can watch it on-demand here.