Moody’s reviews Telesat Canada

Moody's Investors Service said it placed Telesat Canada's B1 corporate family rating, B1-PD probability of default rating, Ba3 senior secured credit facility rating and B3 senior unsecured notes rating on review, direction uncertain, as the company faces $3.8 billion of debt maturities in early 2017.

The company's SGL-4 speculative grade liquidity rating, which indicates weak liquidity because the company does not have the internal resources to fully address its maturing debts, was affirmed.

Moody’s said the B1 corporate family rating is driven by Telesat's stable and predictable revenue and reasonable leverage, but also by heightened refinance risks for its 2017 maturities, its private equity ownership and the related risks of future shareholder friendly actions that would adversely affect leverage. The company's strong business profile, featuring a stable contract based revenue stream with a nearly five-year equivalent revenue backlog of $4.5 billion that is booked with well-regarded customers, provides a solid positive consideration, the agency noted.

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