Moody’s applies Caa1 to Avanti notes

Moody's Investors Service said it assigned a Caa1 rating to $125 million new senior secured notes maturing 2019 issued by Avanti Communications Group plc.

The existing ratings are unaffected and the outlook remains stable.

The new notes totaling $125 million, which were issued without an intermediary at a price of 92, add to Avanti's $370 million six-year bonds sold in September 2013 with a 10% coupon. The new notes, together with an ordinary share issuance to raise some £7.2 million, which follows a share issuance of $92.8 million earlier this year, represent the final capital raise sufficient to complete the financing of Avanti's new, fifth satellite, Hylas 4 which is expected to cost around $300 million in total. The company plans to launch Hylas 4 in the first quarter of 2017, slightly earlier than originally planned.

Moody's said the construction and launch of Hylas 4 will provide Avanti with significantly increased Ka-band service capacity and increase the collateral value of the company's assets, which with the exception of its investment in Artemis comprises a relatively young satellite fleet with long residual lives.

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