Intelsat Jackson shops $2.65 billion three-part bond deal, pricing expected Tuesday

By Paul Deckelman

New York, March 21 - Intelsat Jackson Holdings SA began marketing a quickly-shopped $2.65 billion three-part offering of new senior notes on Monday, with syndicate sources expecting the issue to price early Tuesday.

Sources heard that price talk envisioning a yield of 7% to 7¼% had emerged on the planned eight-year tranche, which will have four years of call protection; talk of 7¼% to 7½% was heard on the 10-year tranche, which will have five years of protection, while the 12-year notes, which will have six years of call protection, were being talked at a yield of 7½% to 7¾%.

Tranche sizes have not been set yet, and ratings are also to be determined.

The Rule 144A/Regulation S deal, which is being sold with registration rights, was pitched to investors via a mid-day conference call on Monday, shortly after the Luxembourg-based subsidiary of international communications satellite company Intelsat SA announced the behemoth-sized deal, the sources added.

Books on the deal are expected to close at 11 a.m. ET on Tuesday, with pricing expected after that.

The deal is being brought to market via bookrunners Barclays Capital Inc., Merrill Lynch, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. and Morgan Stanley & Co. Inc.

Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., RBC Capital Markets LLC and UBS Securities LLC will act as co-managers on the deal.

Intelsat Jackson plans to use the deal proceeds, along with cash on hand, to fund tender offers for several series of the company's bonds which were separately announced on Monday.

Theses include the $625.3 million of outstanding 8½% senior notes due 2013, the $681 million of outstanding 8 7/8% senior notes due 2015 and the $400 million of outstanding 8 7/8% series B senior notes due 2015 all issued by Intelsat Jackson's indirect subsidiary, Intelsat Subsidiary Holding Co. SA, as well as its own $55 million of outstanding 9¼% senior notes due 2016 and $284.6 million of outstanding 11½% senior notes due 2016. Proceeds could also go for general corporate purposes, which could include the repayment, redemption, retirement or repurchase in the open market of other as yet-unspecified debt of ultimate corporate parent Intelsat SA or its subsidiaries.

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