Eutelsat To Pay Down Debt of Satmex Subsidiary

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PARIS — Satellite fleet operator Eutelsat will redeem $360 million in bonds, carrying an average 9.6 percent annual interest, from bondholders in Eutelsat Americas, the former Satmex fleet operator that Eutelsat purchased in January.

In an example of the kind of transaction that was beyond the reach of the former Satmex, Eutelsat is redeeming the bonds three years ahead of their May 2017 maturity date for 104.75 percent of their principal value, or $377 million, plus accrued and unpaid interest to May 15 of this year.

The redemption will be completed using proceeds from Eutelsat’s own bond issue, effectuated in December, which totaled 930 million euros ($1.27 billion) in six-year notes carrying an interest rate of 2.63 percent — “very attractive conditions,” Paris-based Eutelsat said April 11.

Early redemption of the Satmex/Eutelsat Americas bonds will trigger accelerated recognition, by Eutelsat, of some $10.9 million in financing costs associated with the Eutelsat Americas acquisition. 

 

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