Viasat Announces Upsizing and Pricing of $1,975 Million of Senior Secured Notes

Rhea-AI Summary

Viasat's subsidiaries, Connect Finco SARL and Connect U.S. Finco , have upsized and priced an offering of $1,975 million in 9.000% Senior Secured Notes due 2029. This is an increase from the previously announced $1,250 million. The notes will be issued at 100.00% of face value and are expected to close on September 25, 2024. They will be secured on a first-lien basis by assets also securing the Issuers' existing senior secured credit facilities.

The net proceeds, along with cash on hand, will be used to redeem all outstanding 6.750% Senior Secured Notes due 2026 and pay related fees. The notes are being offered to qualified institutional buyers in the U.S. and outside the U.S. under Rule 144A and Regulation S, respectively, of the Securities Act of 1933.

Positive

• Successful upsizing of the note offering from $1,250 million to $1,975 million
• Secured first-lien basis for the new notes, enhancing their attractiveness to investors
• Refinancing of existing 6.750% Senior Secured Notes due 2026 with new 9.000% notes

Negative

• Higher interest rate of 9.000% on new notes compared to 6.750% on existing notes
• Increased debt load with the upsized offering of $1,975 million

Insights

Financial Analyst

Viasat's upsized $1.975 billion senior secured notes offering at 9% interest rate is a significant financial move. The substantial increase from the initially announced $1.25 billion suggests strong investor demand, despite the high yield. This could indicate market confidence in Viasat's future prospects, particularly post-Inmarsat acquisition.

The refinancing of the 6.75% 2026 notes with these new 9% 2029 notes will increase Viasat's interest expenses. However, it extends the maturity profile, potentially providing more financial flexibility. The first-lien security on assets adds a layer of protection for noteholders, which might have contributed to the successful upsizing.

Investors should monitor how this increased debt load and higher interest costs impact Viasat's financial health and ability to invest in growth initiatives, especially in the competitive satellite communications sector.

Corporate Strategy Expert

This refinancing move by Viasat appears to be a strategic maneuver to optimize its capital structure following the Inmarsat acquisition. By extending debt maturity to 2029, the company is likely aiming to align its financial obligations with long-term growth plans in the satellite industry.

The substantial upsizing of the offering could indicate that Viasat is preparing for significant capital expenditures or potential market opportunities. However, the high 9% interest rate suggests that the market perceives some risk, possibly related to the integration of Inmarsat or the competitive landscape in the satellite communications sector.

Investors should closely watch how Viasat leverages this additional capital to drive growth and synergies from the Inmarsat acquisition, as well as its ability to manage the increased debt service costs in the coming years.

CARLSBAD, Calif., Sept. 11, 2024 /PRNewswire/ -- Viasat, Inc. (Nasdaq: VSAT) announces that its wholly-owned indirect subsidiaries, Connect Finco SARL and Connect U.S. Finco LLC (together, the "Issuers"), have upsized and priced their offering of $1,975 million in aggregate principal amount of its 9.000% Senior Secured Notes due 2029. The offering was upsized from the previously announced $1,250 million in aggregate principal amount. The Issuers are wholly-owned indirect subsidiaries of Connect Bidco Limited ("Inmarsat"), a wholly-owned indirect subsidiary of Viasat.

The notes were offered and sold to persons reasonably believed to be qualified institutional buyers in the United States through a private placement pursuant to Rule 144A and outside the United States pursuant to Regulation S under the Securities Act of 1933, as amended (the "Securities Act"). The notes will have an interest rate of 9.000% per annum and will be issued at a price equal to 100.00% of their face value.

The closing of the sale of the notes, which is subject to customary conditions, is expected to occur on or about September 25, 2024. The notes and the related guarantees will be secured on a first-lien basis by assets that also secure on a first-lien basis the indebtedness under the Issuers' existing senior secured credit facilities.

The net proceeds from the offering together with cash on hand, are expected to be used to redeem all of the Issuers' outstanding 6.750% Senior Secured Notes due 2026 (the "Inmarsat 2026 Notes") and to pay related fees and expenses.

The notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements of the Securities Act. This press release is neither an offer to sell nor the solicitation of an offer to buy the notes or any other securities, and no offer, solicitation or sale will be made in any jurisdiction in which, or to any persons to whom, such an offer, solicitation or sale is unlawful. Any offers of the notes will be made only by means of a private offering memorandum. This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.

Safe Harbor Statement

This press release contains forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. Forward-looking statements include, among others, statements regarding the proposed offering, the use of proceeds therefrom and the redemption of the 2026 Inmarsat Notes in connection therewith, and are generally identified with words such as "believe," "could," "expect," "intend," "may," "plan," "will" and similar expressions. Such statements reflect management's current expectations and judgment as of the date of this press release. Factors that could affect Viasat's forward-looking statements include, among other things, risks and uncertainties associated with the satisfaction of customary closing conditions related to the offering. In addition, please refer to the risk factors contained in Viasat's SEC filings available at www.sec.gov, including Viasat's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. Viasat undertakes no obligation to update or revise any forward-looking statements for any reason.

View original content:https://www.prnewswire.com/news-releases/viasat-announces-upsizing-and-pricing-of-1-975-million-of-senior-secured-notes-302245706.html

SOURCE Viasat, Inc.

FAQ

What is the size and interest rate of Viasat's (VSAT) new Senior Secured Notes offering?

Viasat's subsidiaries have priced an offering of $1,975 million in 9.000% Senior Secured Notes due 2029.

When is the expected closing date for Viasat's (VSAT) new notes offering?

The closing of the sale of the notes is expected to occur on or about September 25, 2024, subject to customary conditions.

How will Viasat (VSAT) use the proceeds from the new notes offering?

The net proceeds, along with cash on hand, will be used to redeem all outstanding 6.750% Senior Secured Notes due 2026 and pay related fees and expenses.

Are Viasat's (VSAT) new Senior Secured Notes registered under the Securities Act?

No, the notes have not been registered under the Securities Act or any state securities laws and are being offered through private placement to qualified institutional buyers.