10/2/2023 - Written By Chris Quilty
Viasat refinanced its Inmarsat bridge facility on Sept. 21, issuing $733M of Senior Notes to retire the unsecured bridge loan facility that Viasat entered into on May 30 pursuant to the Inmarsat acquisition close. The Notes, which mature in 2031, were issued at par with a 7.5% annual interest rate.
Not bad for Viasat. But not so much for the banks, which evidently agreed to price the Notes before Viasat suffered anomalies on two satellites (ViaSat-3 and I-6 F2) valued at a combined $1.3B. When the banks marketed the notes to investors, the “clearing price” was 65% of par, implying a $257M loss for the banks and junk status for Viasat’s unsecured debt at an effective yield of ~15%.
Viasat will need to come back to the market in about a year to refinance the $700 million principal amount of 2025 Senior Notes that were issued in 2017 and carry an interest rate of 5.625%. The gap between those two goalposts measures ~$70M of annual interest costs.
SOURCE: https://investors.viasat.com/news-releases/news-release-details/viasat-announces-pricing-7334-million-senior-notes