Telesat waives consent condition, gets tenders for 34.5% of 11% notes

By Susanna Moon

Chicago, May 11 - Telesat Holdings Inc. subsidiary Telesat Canada holders had tendered $238.7 million principal amount, or 34.5%, of its $692,825,000 outstanding principal amount of 11% senior notes due 2015 as of 5 p.m. ET on May 14, the consent date.

The company is waiving the condition to the tender offer and consent solicitation that it receives consents from holders of at least a majority of the outstanding notes by the early tender deadline, according to a company news release.

Telesat waived the consent condition and chose to accept for early payment all of the notes tendered by the consent date.

As previously noted, the company will pay $1,060 per $1,000 principal amount of notes tendered by the consent deadline. The total purchase price includes a $30 consent payment.

Holders will also receive accrued interest up to but excluding the payment date.

Telesat Canada is soliciting consents from the holders of at least a majority of the outstanding notes to eliminate substantially all of the restrictive covenants, eliminate or modify some events of default and eliminate or modify some other provisions.

The tender offer will continue to run until midnight ET on May 25. The offer began on April 30.

Tendered notes may no longer be withdrawn.

Holders who tender their notes after the consent deadline will receive only the base payment of $1,030 per $1,000 of notes plus accrued interest.

Those who tender their notes must consent to the proposed amendments, and holders may not deliver consents without tendering notes.

The final payment date is expected to be May 29.

Telesat said it plans to redeem any notes that remain outstanding after the completion of the tender offer at 105.5% of par plus accrued interest up to but excluding the redemption date.

The completion of the tender offer and the consent solicitation also was conditioned on the issuance of new debt with enough proceeds to fund the tender offer or the redemption of the notes.

The company issued $700 million principal amount of 6% senior notes due May 15, 2017 on May 14. Proceeds of the new notes were used to settle early tendered 11% notes.

The dealer managers are J.P. Morgan Securities LLC (800 245-8812 or 212 270-1200), Credit Suisse (800 820-1653 or 212 325-2476) and Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057). The information agent is i-Deal LLC (212 849-5000 for brokers and banks, others call 888 593-9546). The depositary is Continental Stock Transfer & Trust Co. (212 509-4000 ext. 536).

Telesat is a fixed satellite services operator based in Ottawa.

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