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Satmex increases interest rate on first-priority notes due 2011 to 12%
By Angela McDaniels
Tacoma, Wash., June 2 - Satelites Mexicanos, SA de CV increased the coupon on its first- priority senior secured notes due 2011 to 12% after failing to meet one of the conditions of a previously granted waiver, according to an 8-K filing with the Securities and Exchange Commission.
The new rate is effective for the period that began Sunday and ends June 30.
In connection with the interest rate increase, Satmex made a $374,408.58 payment on Wednesday to the noteholders.
The company received waivers from the holders of the first-priority notes and its second-priority senior secured notes due 2013 that allows it to enter into a satellite construction agreement with Space Systems/Loral, Inc. and to make up to $100 million of cash payments in connection with the agreement and a satellite launch agreement.
In return, Satmex agreed to increase the interest rate on the first-priority notes to Libor plus 925 basis points from Libor plus 875 bps with further potential increases upon the occurrence of certain events, including the failure by Satmex to enter into an agreement for the sale of all or substantially all of its assets or capital stock prior to May 30.
The company said that as of May 30, it had not entered into such an agreement, and it is not currently engaged in active negotiations for any such sale.
On March 17, the company said it was continuing to explore its strategic alternatives and restructuring options after the termination of a stock purchase agreement with EchoStar Satellite Acquisition LLC and a Mexican joint venture partner.
As previously reported, EchoStar terminated the stock purchase agreement because Satmex did not obtain necessary consents and waivers from noteholders.
Satmex is a Juarez, Mexico-based satellite coverage provider.
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