On February 29, 2016, Moody’s Investors Service downgraded Intelsat S.A.’s corporate family and probability of default ratings, respectively, to Caa2 from B3 and Caa2-PD from B3-PD. All of the Company’s debt instrument ratings at Intelsat Jackson Holdings S.A. were downgraded: senior secured bank credit facility to B1 from Ba3; senior unsecured guaranteed bonds/ debentures to Caa2 from B3; senior unsecured non-guaranteed bonds/debentures to Caa3 from Caa1. Intelsat (Luxembourg) S.A.’s senior unsecured regular bonds/ debentures were downgraded to Ca from Caa2. According to Moody’s, the actions were prompted by a combination of business fundamentals and capital structure consid-erations that, from Moody’s perspective, signal the Company’s debt structure has become unsustainable.
On March 1, 2016, Standard & Poor’s Ratings Services lowered its corporate credit rating on Intelsat S.A. to CCC from B, is senior secured credit facility at Jackson to B- from BB- and its senior unsecured guaranteed notes at Jackson to CCC+ from B+. “The ratings downgrade reflects our view that the company could consider a subpar debt exchange or redemption as part of its balance sheet initiatives, which in light of Intelsat’s steep debt leverage we would view as a selective default rather than opportunistic,” said Standard & Poor’s credit analyst Michael Altberg. Read more on distressed companies.
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