Eutelsat Secures Major Debt Refinancing with €1.5 Billion Bond Issue

Eutelsat issues new bonds to refinance high-interest debt, aiming to reduce interest expenses and strengthen its balance sheet amid strong LEO revenue growth.

The European satellite operator Eutelsat is advancing a comprehensive financial restructuring plan. A cornerstone of this effort is a newly announced bond offering, designed to replace existing costly debt and strengthen the company's balance sheet.

Strategic Financial Repositioning Takes Shape

On February 23, Eutelsat announced the issuance of €1.5 billion in Senior Notes. The proceeds, combined with €400 million from a credit facility secured in November, are earmarked for repaying current liabilities. This move is expected to significantly reduce the company's interest expenses.

The bond issue consists of two tranches with maturities extending to 2031 and 2033, both guaranteed by Eutelsat S.A. and OneWeb Holdings Limited. Market data indicates the five-year notes carry a yield of approximately 6.375%, while the seven-year notes offer about 6.875%. Fitch Ratings has assigned both an expected rating of BB.

Specifically, Eutelsat plans to use the funds to fully redeem two bonds: a €600 million note with a 2.25% coupon maturing in 2027, and another €600 million note carrying a high 9.75% coupon due in 2029. The company will also terminate a loan and a credit facility from 2021. Replacing the high-interest 2029 bond is a particular focus for lowering ongoing financing costs. Industry observers note this refinancing replaces "older, more expensive credit" and pushes key repayment deadlines into the next decade.

Operational Performance Supports Financial Strategy

The company's recent operational results provide a solid backdrop for its refinancing activities. For the first half of the 2025-26 fiscal year (July to December), Eutelsat reported revenue of €592 million, representing stable performance on a comparable basis. Its Low Earth Orbit (LEO) business segment showed strong growth, advancing nearly 60% to €111 million and now accounting for roughly 20% of total revenue.

Adjusted EBITDA reached €308 million, with a margin of 52.1%. The company's net debt position improved to €1.3 billion, and the ratio of net debt to EBITDA strengthened considerably to 2.00x from 3.92x a year earlier.

This bond issuance follows a series of other financial maneuvers. In December 2025, Eutelsat completed a €1.5 billion capital increase, which prompted rating upgrades from Moody's and Fitch. Earlier in February, the group secured approximately €1 billion in government-guaranteed export credit financing dedicated to new LEO satellites.

A setback occurred in late January when a planned €550 million sale of its passive ground infrastructure to EQT Infrastructure fell through. As a result, Eutelsat revised its full-year leverage ratio forecast upward from 2.5x to around 2.7x.

Share Price and Forward Outlook

Eutelsat shares traded at €2.26 on February 24. Following the release of its half-year figures on February 13, the stock price had climbed almost twelve percent. Over a 52-week period, the share price has fluctuated between €1.15 and €9.30, highlighting significant volatility. The company's current market capitalization stands at about €2.6 billion.

Management has reaffirmed its targets for the current fiscal year, anticipating stable revenues across its four operational segments and LEO growth of approximately 50%. Furthermore, Eutelsat has raised its medium-term EBITDA margin target for 2028-29 from 60% to 65%. The next operational update is scheduled for May 12 with the release of third-quarter results.

The successful placement of this bond offering would largely complete the company's refinancing plan, establishing a more robust financial foundation for its strategic growth investments.