Fitch puts Intelsat on watch

Fitch Ratings said it placed Intelsat Ltd.'s ratings on Rating Watch Negative, including the B issuer default rating and CCC/RR6 senior unsecured notes.

The action follows Intelsat's announcement that private equity firm BC Partners has agreed to acquire a 76% stake in Intelsat for $4.6 billion in cash. The current private equity owners of Intelsat will retain ownership of the remaining 24% stake.

It is expected that Intelsat's debt will increase by $3.85 billion, which will increase the debt-to-EBITDA ratio to more than 10x based on the last-12-months EBITDA as of the first quarter. The agency said the higher leverage and weaker free cash flow will likely result in Intelsat's issuer default rating being downgraded to CCC.

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