Intelsat asks court to approve $7.88 billion DIP-to-exit financing

By Sarah Lizee

Olympia, Wash., Dec. 14 – Intelsat SA is seeking court approval to borrow up to $7.88 billion under a DIP-to-exit financing package, according to a motion filed Monday with the U.S. Bankruptcy Court for the Eastern District of Virginia.

As previously reported, the package consists of a $500 million superpriority revolver fully syndicated by a group of bank arrangers, a $1 billion superpriority term loan A facility, of which $500 million will be syndicated by the bank arrangers and $500 million purchased by separate backstop parties, a $3.38 billion first-lien term loan B facility, of which $2.88 billion will be syndicated by the bank arrangers and $500 million will be purchased by the backstop parties, and $3 billion in secured senior notes, which will be fully backstopped by the backstop parties.

The bank arranger group consists of Barclays, Credit Suisse Loan Funding LLC, Deutsche Bank Securities Inc., Goldman Sachs Lending Partners LLC and JPMorgan Securities LLC.

The revolver will mature in five years and bear interest at Libor plus 225 basis points to 275 bps, subject to a 0% Libor floor and based on leverage. The rate will start at Libor plus 275 bps for the first fiscal quarter. There is a commitment fee that ranges from 25 bps to 50 bps, based on leverage, with the fee starting out at 50 bps for the first fiscal quarter. The revolver will have up to $500 million available for letters of credit and up to $75 million for swingline loans.

The term loan A facility will bear interest at Libor plus 275 bps, subject to a 0% Libor floor.

The term loan B facility will bear interest at Libor plus 425 bps, subject to a 0.5% Libor floor.

Subject to the satisfaction of certain conditions, the financing will convert to an exit facility upon the debtors’ emergence from Chapter 11.

The company said the facilities are a key component of its overall restructuring efforts because they provide the debtors with the flexibility and liquidity necessary to fund the distributions under the plan, repay the outstanding pre-petition secured debt, refinance their $1.5 billion existing DIP facility, execute key operational tasks, including financing expenses related to their C-band clearing efforts, and fund their business plan through and following emergence.

A hearing is scheduled for Jan. 11.

Intelsat is a Luxembourg-based satellite telecommunications company. The company filed bankruptcy on May 14, 2020 under Chapter 11 case number 20-32299.

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