This brings the total quantum of hybrid debt to €1.3 billion. SES has agreed to sell: €550 million of Deeply Subordinated Fixed Rate Resettable Securities with a first call date on 29 January 2024; and Coupon of 5.625% (Yield of 5.75%)
The transaction is also fully consistent with SES’s commitment to maintaining its investment grade credit rating (BBB/Baa2).
The Securities will be guaranteed on a subordinated basis by SES Global Americas Holdings GP. SES intends to use the net proceeds from the offering to repay certain existing indebtedness of the group (including the remaining existing indebtedness of O3b) as well as for general corporate purposes.
The hybrid bonds issued by SES are non-dilutive instruments that are expected to receive 50% equity treatment from each of Moody’s and Standard & Poor’s and be classified as equity under IFRS.
“The successful completion of SES’s second hybrid issuance in benchmark size is another important milestone and is an important element of SES’s financing strategy,” commented Padraig McCarthy, CFO of SES.
“The transaction was strongly supported by a wide range of high quality existing and new investors.
“A substantial part of the proceeds will be used to complete the refinancing of the entire O3b debt in 2016, allowing SES to increase the amount of financial synergies realised from 2017. These synergies will complement O3b’s continuing strong operational performance.”
J.P. Morgan acted as sole Global Co-ordinator and Structuring Agent & Joint Bookrunner. The other Joint Bookrunners were Deutsche Bank, Goldman Sachs International and HSBC. BBVA and Commerzbank also participated as Co-Lead Managers.