Eutelsat Launches Major Debt Refinancing to Strengthen Post-Merger Balance Sheet

Eutelsat issues €1.5 billion in bonds to refinance high-cost debt, slashing interest costs and funding its expanding low-Earth orbit satellite constellation.

The European satellite operator Eutelsat has initiated a significant financial overhaul, launching a €1.5 billion bond offering. This move is designed to retire higher-cost debt, marking a pivotal step in cleaning up the company's balance sheet following its merger with low-Earth orbit (LEO) specialist OneWeb.

Operational Performance Provides Foundation

The company's recent half-year results for 2025-26, published in mid-February, provided the backdrop for this refinancing. Total revenue remained relatively stable at €591.6 million. The standout performer was the LEO connectivity business, which saw revenue surge by nearly 60% to €110.5 million. Connectivity now represents 54% of segment revenue and continues to grow at a double-digit pace.

Conversely, the traditional video segment contracted by 12% to €267 million, impacted by sanctions against Russian broadcasters with an annualized effect of approximately €16 million. Adjusted EBITDA decreased to €308.2 million, with the margin at 52.1%—a decline of 3.4 percentage points from the prior year.

Bond Details and Interest Savings

The new bond issuance consists of two tranches of Senior Notes, guaranteed by both Eutelsat S.A. and OneWeb Holdings Limited, with maturities extending to 2031 and 2033. Market data indicates yields of approximately 6.375% for the five-year notes and 6.875% for the seven-year notes.

Proceeds will be used to redeem two existing bonds: a high-cost 9.75% note due in 2029 and a 2.25% note maturing in 2027, each valued at €600 million. The company will also repay credit facilities established under a June 2021 agreement. This strategic shift is expected to substantially reduce Eutelsat's interest expense, given the significant differential from the 9.75% rate.

A Transformed Debt Profile and Credit Rating Upgrades

Eutelsat's net debt stood at €1.3 billion as of the end of December 2025, representing a 50% reduction compared to the previous year. The leverage ratio, measured as net debt to adjusted EBITDA, improved dramatically from 3.92x to 2.00x.

This bond placement is the latest in a series of financial maneuvers. In December 2025, the company completed a capital increase raising €670 million. The preceding November saw Eutelsat secure a new €400 million credit facility. In response to this strengthened financial position, credit rating agencies Moody's and Fitch have both upgraded the company's rating.

Funding Future Growth in LEO

Alongside balance sheet restructuring, Eutelsat is securing funding for its ambitious growth plans in low-Earth orbit. The company has arranged export credit financing totaling almost €1 billion to support the expansion of its LEO satellite constellation.

This expansion is already underway. In January 2026, Eutelsat placed an order with Airbus Defence and Space for an additional 340 satellites, supplementing a prior order for 100 units.

Confirmed Targets and Long-Term Margin Ambition

Management has reaffirmed its guidance for the full 2025-26 fiscal year. The company expects segment revenue to remain stable year-over-year, with LEO revenue growing around 50%. The leverage ratio is projected to be approximately 2.7x by the fiscal year-end. While the EBITDA margin is anticipated to be slightly below the prior year's level, the long-term target is for it to climb to about 65% by the 2028-29 period.

This comprehensive refinancing operation largely concludes the financial restructuring necessary after the OneWeb integration, positioning Eutelsat with a more sustainable capital structure for its strategic pivot towards connectivity.