– Intelsat is juggling its satellite-deployment schedule to cope with launch-vehicle delays and the need to replace an aging satellite before it runs out of fuel.
Washington-based Intelsat, which is also refinancing several billion dollars of its debt, is finding out that even the world’s largest satellite-fleet operator is at the mercy of the current bottlenecks and supply-chain hiccups affecting the global commercial launch industry.
As a result, the Intelsat-JSAT Horizons-2 satellite is facing a delay of up to a year before it will be entered into service. The problem is the result of delays with Sea Launch Co. LLC’s Land Launch vehicle, which is still expected to debut commercial flights later this year with another Intelsat satellite, IS-11 – formerly known as PAS-11.
Horizons-2, a joint venture with JSAT Corp. of
, was scheduled for launch late this year aboard a Land Launch vehicle. That date has now been pushed to late 2008 as Sea Launch officials cope with a supply shortage that is forcing them to allocate rocket components between their new Land Launch and proven Sea Launch operations.
The Land Launch and Sea Launch Zenit-3SL vehicles are virtually identical. The former will operate from
‘s Baikonur Cosmodrome in
, while the latter continues to operate from a mobile platform that conducts launches from equatorial regions of the
Sea Launch President Rob Peckham confirmed the Horizons-2 delay but said it might not be as long as a year. Peckham also said that satellites set for Land Launch after Horizons-2 likely will be delayed as well, but for shorter periods than Horizons-2.
“Horizons-2 is suffering a not insignificant delay and we have been up front with our customer about this,” Peckham said Jan. 5. “But this does not imply that customers coming after will see a correspondingly long delay.” Peckham said the scheduled December launch of a Russian government satellite on a two-stage version of the Zenit rocket from the Land Launch launch pad is now expected in the first quarter of 2007.
Dianne VanBeber, Intelsat vice president for investor relations, said the company is not happy with the new schedule but has “put into place a launch plan that accommodates the late-2008 slot.”
Intelsat has recently asked the launch consortium of Evry, France, to accelerate the scheduled launch of another Intelsat satellite, the Galaxy 17, to permit Intelsat to maintain continuous operations from a slot whose current occupant, the SBS-6 satellite, is nearing the end of its life. Galaxy 17 is now set for an Ariane launch in April.
In what VanBeber called “space choreography,” Intelsat will operate Galaxy 17 from 91 degrees west longitude, replacing Galaxy 11, a Boeing 702 model satellite launched in 1999 whose solar arrays have a defect that results in a gradual loss of power.
Galaxy 11 will be moved to 74 degrees west, to replace Intelsat’s SBS-6 satellite. Launched in 1990, the Boeing-built SBS-6 is already past its originally expected in-orbit retirement date. Intelsat has said in filings to the U.S. Federal Communications Commission that SBS-6 will be placed into a graveyard orbit in October or November.
Intelsat announced in a Jan. 8 filing to the U.S. Securities and Exchange Commission that it was refinancing what could be nearly $4 billion in its debt in several separate transactions that began Jan.9.
The first of the transactions, for $600 million, will replace a loan that Intelsat took out in 2006 at a particularly inopportune time given the debt environment at the time. The debt carried an interest rate equivalent to the prevailing interbank rate plus 6 percent.
The interest rate on the new debt, due in 2015, is the interbank rate plus 3.5 percent.
VanBeber declined to discuss the pricing of the other debt tranches but said Intelsat expected to realize similar savings when they are priced.
Credit-rating service Moody’s said Jan. 8 that the Intelsat refinancing will not change Intelsat’s continued high level of debt. Moody’s left Intelsat’s debt rating unchanged, and said Intelsat, given its current private-equity investor shareholder mix, is more likely to pay dividends than use its cash flow to reduce its debt in the near term.