PanAmSat and New Skies Satellites were softer in trading, but the latest moves are not related to the recent electrical failure of an Intelsat satellite. PanAmSat's $1.66 billion "B" loan was quoted at 100 1/4-101, down from 101 1/4-101 1/2, as investors took note of a repricing. Meanwhile, New Skies $460 million "B" was quoted at 101-101 3/4 also down from the 101 3/4-102 context. "People are not willing to pay 102 if the deal is going to be repriced," one trader said.
PanAmSat's "B" loan was initially priced at LIBOR plus 2 3/4%, but the spread is currently in the process of being cut to LIBOR plus 2 1/4% with a step-down to LIBOR plus 2%. Citigroup is leading the repricing. The credit initially backed the company's acquisition by Kohlberg Kravis Roberts & Co., The Carlyle Group and Providence Equity Partners (LMW, 7/12).
Though New Skies is not in the same situation as PanAmSat, investors are considering the refinancing factor, the dealer said. "There is always a risk. People are getting more cautious," he noted. The New Skies debt backed The Blackstone Group's acquisition of the satellite operator (10/4). This deal is led by Deutsche Bank and ABN Amro. Pricing on the "B" loan is LIBOR plus 2 1/2%. A PanAmSat spokeswoman declined comment. A New Skies spokesman did not return calls.
Softened levels for the two satellite operators are unrelated to the recent electrical failure on Americas-7, an Intelsat satellite, said the trader. The malfunction, which was attributed to an electrical distribution anomaly, has occurred while Zeus Holdings, a group formed by Apax Partners, Permira, Apollo Management and Madison Dearborn Partners, is pursuing a $3.1 billion acquisition of the satellite operator. An Intelsat spokeswoman said the satellite failure could impact the sale, because they would be losing the value of the satellite and potentially the business. But it's only one satellite and Intelsat owns 28 others and lease capacity in two others. Zeus is currently evaluating the effect, she added.