Moody's rates Intelsat liquidity SGL-2

Moody's Investors Service said it assigned an SGL-2 speculative grade liquidity rating to Intelsat.

Moody's said it believes that Intelsat's liquidity will remain "Good" over the next 12 months.

Intelsat's SGL-2 speculative grade liquidity rating reflects the company's strong liquidity profile. Moody's believes that Intelsat, with approximately $400 million in cash on hand at Sept. 30, high operating margins, meaningful annual free cash flow capacity, and $400 million unused availability under its committed revolving credit facility, has sufficient liquidity to meet its near-term operating, investment and financial obligations.

Moody's, however, said it expects Intelsat's liquidity to deteriorate in the intermediate term due to an anticipated higher interest burden associated with the expected increase in leverage as a result of the announced Zeus transaction where ownership will transfer to a consortium of private equity firms. The higher interest burden will not only erode free cash flow but will also require the company to refinance its revolving credit facility due to the level of financial covenants in the current facility.

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