SATS has launched and priced its inaugural issue of US$500 million ($671.4 million) worth of fixed rate senior unsecured notes. The notes, which are issued under the group’s US$3 billion multicurrency debt issuance (EMTN) programme, carry a coupon of 4.828% per annum (p.a.) and are due on Jan 23, 2029. The programme was newly established on Nov 17, 2023.
The notes are immediately converted into Euros through a cross currency swap to achieve a fixed rate of 3.498% per annum. This is to match the currency of the existing bridge loans to hedge SATS’s foreign currency exposure.
According to SATS, this refinancing exercise will result in an "all-in” interest saving of approximately $8.8 million per year.
The proceeds from the issuance of the notes will be used entirely for refinancing SATS’s existing EUR1 billion ($1.46 billion) bridge loans that are maturing in May.
The notes have been assigned a senior unsecured rating of A3 by Moody’s Investors Service. Moody’s has rated the EMTN programme a rating of (P)A3.
The notes were listed by SATS Treasury, SATS’s treasury funding vehicle and are expected to be listed on the Singapore Exchange S68 (SGX) on Jan 24.
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“The inaugural issuance of the US$500 million notes under the EMTN Programme has been very well received with 3.6 times oversubscription by high-quality global investors. The purpose of the debut issuance is primarily aimed at accessing a broader investor base and spreading our debt maturity profile while lowering the group’s overall cost of borrowing,” says Manfred Seah, SATS’ chief financial officer.
“This allows SATS to continue to strengthen its financial position, diversify its funding sources and balance its foreign currency exposure to match the Company’s expanded global footprint. This is a key step for Sats towards restoring profitability and advancing its twin-engine growth strategy,” he adds.
BNP Paribas, DBS Bank, MUFG, Oversea-Chinese Banking Corporation (OCBC) and The Hongkong and Shanghai Banking Corporation Limited, Singapore branch (HSBC) are the joint lead managers and joint bookrunners. DBS and OCBC acted as the joint arrangers for the programme, while OCBC acted as the group’s sole credit rating advisor.
As at 11.03am, shares in SATS are trading flat at $2.89.
