Eutelsat Secures Favorable Debt Terms to Fuel Expansion

Eutelsat's €1.5 billion bond issuance refinances high-cost debt, secures funding for LEO expansion, and strengthens its financial position for growth in space-based internet.

Eutelsat Communications has taken a decisive final step in its balance sheet restructuring. The satellite operator announced a bond issuance of €1.5 billion on Monday, a move designed to replace costly legacy debt and solidify funding for its strategic pivot toward the burgeoning space-based internet sector.

Financial Foundation Strengthened for Growth

The proceeds from this issuance of euro-denominated senior notes, with maturities extending to 2031 and 2033, are earmarked for a specific purpose. According to market data from Bloomberg, initial yields are set between 6.375% and 6.875%. Eutelsat intends to use the funds to retire existing obligations that carry significantly higher interest rates. A bond featuring a 9.75% coupon and maturing in 2029 is slated for full repayment.

This strategic refinancing operation is expected to generate a sustainable improvement in the company's interest cost structure. Furthermore, the successful placement unlocks additional credit facilities. Approximately €1 billion in government-guaranteed export financing is contingent on this bond issue, with those funds directed toward expanding the satellite fleet.

Low Earth Orbit Segment Emerges as Key Driver

This financial repositioning supports a broader operational transformation. The company's traditional video business remains under pressure, having contracted by over 12% on a constant currency basis. In contrast, the Low Earth Orbit (LEO) division, driven by the OneWeb constellation, is becoming the primary growth engine. OneWeb revenues surged by nearly 60% during the first half of the fiscal year.

Recent financial maneuvers are already reflecting positively on the balance sheet. A capital increase finalized in December contributed to a sharp reduction in net debt, which stood at €1.3 billion at the half-year mark. Consequently, the leverage ratio improved dramatically, falling from nearly four times to approximately two times adjusted EBITDA.

Management has reaffirmed its outlook for the 2025-26 fiscal year amid these developments. Eutelsat anticipates overall revenues to remain stable while projecting another 50% growth for its LEO business unit. With the latest bond issuance now underway, the financial groundwork for these objectives is considered complete.