Intelsat Takes Out Super-Fast Dividend Deal

Intelsat rattled bondholders and some lenders by taking a $300 million dividend only days after completing the financing backing the buyout.

  • 04 Feb 2005
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Intelsat rattled bondholders and some lenders by taking a $300 million dividend only days after completing the financing backing the buyout. Despite grumbling from certain quarters, mainly bondholders, the deal should not have been a surprise, market players said. One loan banker said, "The debt got downgraded and people were kind of rattled because the deal closed just [a few] days ago." But lenders knew it was possible and in the documents, he added. There have been over 30 dividend deals in recent months, but what is exceptional here is the timing, he added.

Deutsche Bank, Credit Suisse First Boston and Lehman Brothers led the financing backing the acquisition of the satellite company by Zeus Holdings, an entity formed by Apax Partners, Apollo Management, Madison Dearborn Partners and Permira. Officials at the private equity shop did not return calls. Deutsche Bank and Lehman bankers declined comment. CSFB bankers did not return calls by press time.

The bank debt comprises a $300 million revolver and $350 million "B" loan. The debt did not shift in secondary trading. There is also $2.55 billion of bonds. The bank debt was already underleveraged, said another lender. Also the discount notes do not begin to pay interest until the fifth year. Moody's Investors Service cut the long-term debt rating one notch to B2 after the announcement of the 10-year senior discount notes.

  • 04 Feb 2005

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 BNP Paribas 14,443 29 18.07
2 Bank of America Merrill Lynch (BAML) 8,264 27 10.34
3 Lloyds Bank 7,329 24 9.17
4 Citi 6,748 19 8.44
5 JP Morgan 5,220 8 6.53

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
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1 Citi 117,520.50 339 11.05%
2 Bank of America Merrill Lynch 94,721.79 272 8.91%
3 JPMorgan 92,612.23 269 8.71%
4 Wells Fargo Securities 82,597.19 239 7.77%
5 Credit Suisse 69,442.99 183 6.53%