Daily News: March 29, 2012

Telesat Closes Refinancing Transaction With JP Morgan, Others


Telesat Canada, a wholly owned subsidiary of Telesat Holdings Inc., announced its entry into a new credit agreement. The new credit agreement provides for the extension of credit under the following senior credit facilities in the principal amount of up to approximately US$2,550 million and includes:

  • a revolving credit facility in the amount of up to C/US$140 million, available in either Canadian or U.S. dollars, maturing on March 28, 2017;

  • a term loan A facility denominated in Canadian dollars, in the amount of C$500 million, maturing on March 28, 2017;

  • a term loan B facility denominated in Canadian dollars, in the amount of C$175 million, maturing on March 28, 2019; and

  • a term loan B facility denominated in U.S. dollars, in the amount of US$1,725 million, maturing on March 28, 2019.

    JP Morgan Chase Bank is acting as administrative agent and collateral agent with respect to the senior credit facilities. Canadian Imperial Bank of Commerce (CIBC) and JP Morgan acted as joint lead arrangers and joint bookrunners for the revolving credit and term loan A facilities. CIBC acted as syndication agent for the revolving credit and term loan A facilities. Credit Suisse Securities (USA) LLC (CS Securities), Morgan Stanley Senior Funding, Inc. (MS), UBS Securities LLC (UBSS) and ING Bank of Canada (ING), acted as co-managers and co-documentation agents for the revolving credit and term loan A facilities. J.P. Morgan, CS Securities, MS and UBSS acted as joint lead arrangers and joint bookrunners for the term loan B facility. ING and CIBC acted as co-managers and co-documentation agents for the term loan B facility. MS, CS Securities, and UBSS acted as co-syndication agents on the term loan B.

    The proceeds from the senior credit facilities will be used to refinance Telesat’s outstanding borrowings of approximately C$2.1 billion under its previous credit agreement (which agreement has been terminated), and to pay accrued interest, closing costs and other third-party expenses related to the transaction. A portion of the proceeds from the senior credit facilities along with approximately C$200 million of existing cash and cash from operations will be used to make payments of approximately C$705 million, including distributions to Holdings’ shareholders in respect of the stated capital of Holdings and special bonus payments to certain executives and employees of Telesat. The payments were announced on February 22, 2012. Approximately C$586 million of the C$705 million has been paid, with the majority of the balance expected to be paid during the remainder of 2012.

    Telesat is a global fixed satellite services operator providing reliable and secure satellite-delivered communications solutions worldwide to broadcast, telecom, corporate and government customers.