S&P rates Telesat loan BB-

Standard & Poor's said it affirmed its B+ corporate credit rating on Telesat Holdings Inc. and its 100%-owned operating subsidiary Telesat Canada. The outlook is stable.

At the same time, the agency said it assigned a BB- issue-level rating to the company's proposed C$2.55 billion equivalent senior secured credit facility. The recovery rating of 2 indicates an expectation of substantial recovery for lenders in the event of payment default.

The agency said the ratings affirmation reflects its view that the higher debt leverage is within the range of S&P's expectation for the ratings and its expectation that the company should be able to deleverage to the low-5x area within the next couple of years as it improves EBITDA from planned expansion satellite launches.

Finally, the agency said it affirmed the B- issue-level rating and 6 recovery rating on the company's existing $693 million senior unsecured notes due 2015 and $217 million senior subordinated notes due 2017.

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