TORONTO – Moody’s Investors Service has placed the long-term debt ratings of the Intelsat Ltd. group of companies (Intelsat) on review for possible downgrade, citing concerns over private equity firm BC Partners plans to buy a majority stake in the firm for $4.6 billion.
The company now holds a “B2” corporate family rating from Moody’s, which is five steps below investment grade.
The company reported June 19 that funds advised by BC Partners are to acquire 76% of the equity of Intelsat’s parent company, Intelsat Holdings Ltd.
The current shareholders, Apax Partners, Apollo Management, Madison Dearborn Partners, Permira and management, will retain the 24% balance.
It was also reported that Intelsat’s debt will increase by about $3.85 billion, a jump of approximately 33%, and there is no change to expectations of cash generation.
Moody’s review will focus on Intelsat’s business and prospects, debt and capital structure, and liquidity arrangements.
Moody’s anticipates concluding the ratings review in advance of BC Partners’ closing, which the company has indicated is expected within six-to-nine months.
Intelsat, headquartered in Bermuda, is the largest fixed satellite service operator in the world.
