Item 1.01. Entry into a Material Definitive Agreement.
On September 28, 2023, Viasat, Inc. (“Viasat”) completed the closing of the sale of $733.4 million in aggregate principal amount of its 7.500% Senior Notes due 2031 (the “Notes”), receiving net proceeds of approximately $728.2 million, after deducting estimated commissions and offering expenses. The Notes will not initially be guaranteed by any of Viasat’s subsidiaries, but will be jointly and severally guaranteed on a senior unsecured basis (collectively, the “Guarantees”) by any of Viasat’s future domestic restricted subsidiaries (such subsidiaries, the “Guarantors”) that guarantee the existing Viasat revolving credit facility (as amended, the “Viasat Revolving Credit Facility”).
The Notes were issued by Viasat pursuant to an Indenture, dated as of September 28, 2023 (the “Indenture”), by and between Viasat and Wilmington Trust, National Association (“Wilmington Trust”), as trustee, which governs the terms of the Notes. A copy of the Indenture, which includes the form of the Notes, is attached hereto as Exhibit 4.1 and is incorporated herein by reference.
In connection with the closing of the previously announced acquisition (the “Inmarsat Acquisition”) of all of the issued and outstanding shares of Connect Topco Limited, a private company limited by shares and incorporated in Guernsey (“Inmarsat Holdings”), on May 30, 2023, Viasat entered into a Bridge Credit Agreement (the “Bridge Credit Agreement”) by and among Viasat, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto, providing for a $733.4 million unsecured bridge loan facility (the “Bridge Facility”), which was fully drawn. On September 28, 2023, Viasat used the net proceeds from this offering (which were approximately $728.2 million, after deducting estimated commissions and offering expenses), together with cash on hand, to repay the Bridge Facility in full, and in connection therewith, all liabilities, obligations and indebtedness under the Bridge Credit Agreement were released, discharged and satisfied in full.
Certain of the initial purchasers of the Notes and their affiliates have provided to Viasat and its affiliates in the past, and may provide from time to time in the future, certain commercial banking, financial advisory, investment banking and other services in the ordinary course of their business, for which they have received and may continue to receive customary fees and commissions. Certain of the initial purchasers and/or their respective affiliates were lenders under the Bridge Credit Agreement and such initial purchasers or their affiliates may receive a portion of the proceeds of the Notes offering as a result.
A brief description of the terms of the Notes and the Indenture follows:
Interest. The Notes will bear interest at a rate of 7.500% per year, consistent with the effective interest rate in the Bridge Credit Agreement, payable semi-annually in arrears in cash on May 30 and November 30 of each year, beginning on May 30, 2024. Viasat will make each interest payment to the holders of record of the Notes on the immediately preceding May 15 and November 15.
Maturity. The Notes will mature on May 30, 2031, unless earlier redeemed or repurchased.
Ranking. The Notes are, and any future Guarantees will be, Viasat’s and the applicable Guarantors’ general senior unsecured obligations and rank equally in right of payment with all of their existing and future unsecured senior indebtedness, including Viasat’s 5.625% Senior Notes due 2025 and Viasat’s 6.500% Senior Notes due 2028. The Notes are effectively junior in right of payment to their existing and future secured indebtedness (including Viasat’s obligations under the Viasat Revolving Credit Facility, Viasat’s 5.625% Senior Secured Notes due 2027, Viasat’s guarantee of the direct loan facility with the Export-Import Bank of the United States for the ViaSat-2 satellite (the “Ex-Im Credit Facility”), Viasat’s $700.0 million term loan facility and Viasat’s $616.7 million term loan facility (in each case, to the extent of the value of the assets securing such indebtedness)), are structurally subordinated to all existing and future liabilities (including trade payables) of Viasat’s subsidiaries that are not Guarantors (including obligations of the borrower under the Ex-Im Credit Facility and all indebtedness of Inmarsat Holdings and its subsidiaries), and are senior in right of payment to all of Viasat and the applicable Guarantors’ existing and future subordinated indebtedness.
