INTELSAT S.A. Item 1.03. Bankruptcy or Receivership.
Chapter 11 Filing
On
No trustee has been appointed and each Debtor will continue to operate its
business as a "debtor-in-possession" (DIP) subject to the jurisdiction of the
DIP Financing
On
The terms and conditions of the DIP Facility are set forth in the form Superpriority Secured Debtor In Possession Credit Agreement attached to the Commitment Letter. The DIP Facility is expected to include conditions precedent, representations and warranties, affirmative and negative covenants and events of default customary for financings of this type and size. The proceeds of all or a portion of the proposed DIP Facility may be used for, among other things, general corporate purposes, including working capital and permitted acquisitions, administrative costs, premiums, expenses and fees of the transactions contemplated by the Chapter 11 Cases, for the potential payment of C-Band spectrum relocation costs, for payment of court approved adequate protection obligations and other such purposes consistent with the proposed DIP Facility.
The foregoing description of the proposed DIP Facility does not purport to be
complete and is qualified in its entirety by reference to the final, executed
Commitment Letter, a copy of which is attached to this Form 8-K as Exhibit 99.1,
and the final DIP credit agreement, as may be approved by the
Item 2.04. Triggering Events That Accelerate/Increase Direct Financial Obligation
or Off-Balance Sheet Arrangement Obligation.
The filing of the Chapter 11 Cases described above in Item 1.03 constitutes an
event of default that accelerated certain of the Debtors' obligations under the
following debt instruments (the "Debt Instruments") as of such filing on
• $3.1 billion in aggregate principal amount of first lien term loans,
consisting of (i) a $2.0 billion floating rate first lien term loan;
(ii) a $395.0 million floating rate first lien term loan; and (iii) a
$700.0 million fixed rate first lien term loan, pursuant to the Credit
Agreement, dated as of January 12, 2011 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Jackson, as borrower, Intelsat Connect Finance S.A.
("ICF"), as holdings and successor to Intelsat (Luxembourg) S.A.
("LuxCo"), the lenders party thereto from time to time, Bank of America,
N.A ., as administrative agent ("Bank of America "), and the other agent
parties party thereto.
• $490.0 million in aggregate principal amount of the 9.50% Senior Secured
Notes due 2022 issued pursuant to the Indenture, dated as of June 30,
2016 , by and among Intelsat Jackson Holdings S.A. ("Jackson"), the
guarantors party thereto and Wilmington Trust, National Association
("Wilmington Trust "), as trustee;
• $1.3 billion in aggregate principal amount of the 8.00% Senior Secured
Notes due 2024 issued pursuant to the Indenture, dated as of March 29,
2016 , by and among Jackson, the guarantors party thereto and Wilmington
Trust , as trustee;
• $2.0 billion in aggregate principal amount of the 5.50% Senior Notes due
2023 issued pursuant to the Indenture, dated as of June 5, 2013 , by and
among Jackson, the guarantors party thereto and U.S. Bank National
Association , a national banking association ("U.S. Bank "), as trustee and
successor to Wells Fargo Bank, National Association ("Wells Fargo");
• $3.0 billion in aggregate principal amount of the 8.50% Senior Notes due
2024 issued pursuant to the Indenture, dated as of September 19, 2018 , by
and among Jackson, the guarantors party thereto and U.S. Bank , as trustee;
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• $1.9 billion in aggregate principal amount of the 9.75% Senior Notes due
2025 issued pursuant to the Indenture, dated as of July 5, 2017 , by and
among Jackson, the guarantors party thereto and U.S. Bank , as trustee;
• $1.3 billion in aggregate principal amount of the 9.50% Senior Notes due
2023 issued pursuant to the Indenture, dated as of August 16, 2018 , by and
among ICF, the guarantors party thereto and U.S. Bank , as trustee;
• $421.2 million in aggregate principal amount of the 7.75% Senior Notes due
2021 issued pursuant to the Indenture, dated as of April 5, 2013 , by and
among LuxCo , the guarantors party thereto and U.S. Bank , as trustee and
successor to Wells Fargo;
• $1.0 billion in aggregate principal amount of the 8.125% Senior Notes due
2023 issued pursuant to the Indenture, dated as of April 5, 2013 , by and
among LuxCo , the guarantors party thereto and U.S. Bank , as trustee and
successor to Wells Fargo;
• $403.4 million in aggregate principal amount of 12.50% Senior Notes due
2024 issued pursuant to the Indenture, dated as of January 6, 2017 , by and
among LuxCo , the guarantors party thereto and U.S. Bank , as trustee; and
• $402.5 million in aggregate principal amount of 4.50% Convertible Senior
Notes due 2025 pursuant to the Indenture, dated as of June 18, 2018 , by
and among the Company, Intelsat Envision Holdings LLC , as guarantor, and
U.S. Bank , as trustee.
The Debt Instruments provide that, as a result of the Chapter 11 Cases, the principal, accrued and unpaid interest and certain other amounts due thereunder shall be immediately due and payable. Any efforts to enforce such payment obligations under the Debt Instruments are automatically stayed as a result of the Chapter 11 Cases, and the creditors' rights of enforcement in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code.
Item 7.01. Regulation fd disclosure.
Release of Certain Parent Guarantees
On
Press Release
In connection with the filing of the Chapter 11 Cases, the Company issued a
press release on
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Cleansing Material
Prior to the filing of the Chapter 11 Cases, the Company entered into confidentiality agreements (collectively, the "NDAs") in which the Company agreed to publicly disclose certain information, including material non-public information thereunder (the "Cleansing Materials"), upon the occurrence of certain events set forth in the NDAs. A copy of the Cleansing Materials is attached to this Form 8-K as Exhibit 99.3.
Additional Information on the Chapter 11 Cases
Court filings and information about the Chapter 11 Cases can be found at a website maintained by the Company's claim agent Stretto at https://cases.stretto.com/intelsat, by calling 855-489-1434 (toll-free), or by sending an email to intelsatinquiries@stretto.com.
The information contained in this Item 7.01 shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company's filings under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.
Item 8.01. Other items.
Cautionary Note Regarding the Company's Common Stock
The Company cautions that trading in the company's securities during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. Trading prices for the Company's securities may bear little or no relationship to the actual recovery, if any, by holders of the Company's securities in the Chapter 11 Cases. The Company expects that holders of shares of the Company's common stock could experience a significant or complete loss on their investment, depending on the outcome of the Chapter 11 Cases.
Further, the Cleansing Materials described above were not prepared with a view toward public disclosure and should not be relied upon to make an investment decision with respect to the Company. The Cleansing Materials include certain potential values for illustrative purposes only and such values are not the result of, and do not represent, actual valuations, estimates, forecasts or projections by any third party, the Company or its subsidiaries and should not be relied upon as such. Neither the Company nor any third party has made or makes any representation to any person regarding the accuracy of the Cleansing Materials or the ultimate outcome of any potential restructuring transaction, and none of them undertakes any obligation to publicly update the Cleansing Materials to reflect circumstances existing after the date when the Cleansing Materials were prepared or conveyed or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the Cleansing Materials are shown to be in error.
Forward-Looking Statements
This Current Report on Form 8-K contains "forward-looking statements" related to
future events. Forward-looking statements contain words such as "expect,"
"anticipate," "could," "should," "intend," "plan," "believe," "seek," "see,"
"may," "will," "would," or "target." Forward-looking statements are based on
management's current expectations, beliefs, assumptions and estimates and may
include, for example, statements regarding the Chapter 11 Cases, the DIP
Financing, the Company's ability to consummate and complete a plan of
reorganization and its ability to continue operating in the ordinary course
while the Chapter 11 Cases are pending. These statements are subject to
significant risks, uncertainties, and assumptions that are difficult to predict
and could cause actual results to differ materially and adversely from those
expressed or implied in the forward-looking statements, including risks and
uncertainties regarding the Company's ability to successfully complete a
restructuring under Chapter 11, including: consummation of a plan of
reorganization; potential adverse effects of the Chapter 11 Cases on the
Company's liquidity and results of operations; the Company's ability to obtain
timely approval by the
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other third parties and regulatory authorities as a result of the Chapter 11
Cases; the effects of the Chapter 11 Cases on the Company and on the interests
of various constituents, including holders of the Company's common stock; the
Forward-looking statements are also subject to the risk factors and cautionary
language described from time to time in the reports the Company files with the
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits. Exhibit No. Description 99.1 DIP Commitment Letter. 99.2 Press Release, datedMay 13, 2020 . 99.3 Cleansing Materials. 104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
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