Background

  • Capstone has followed the Federal Communications Commission’s (FCC) moves to repurpose a portion of spectrum used by satellite companies for use by the wireless broadband industry and how this could financially benefit companies like Intelsat and SES.

Process

  • We analyzed the FCC’s rulemaking process with respect the repurposing part of the C-band and all other related proceedings.
  • We spoke to a number of stakeholders involved in the process, policymakers and did a thorough review of the Commission’s docket.
  • We also did diligence on international spectrum auctions and how valuable spectrum in the U.S. was compared to other countries.

Outcome

  • We concluded that it was highly likely the FCC would approve a repurposing a part of the C-band and allow the satellite firms to privately negotiate a sale transaction with one or more wireless companies.  We also concluded this spectrum would be seen as highly valuable to the wireless industry and any sale would be a materially delivering event for Intelsat and SES.  Since our first note on the situation was written, shares of Intelsat have risen over 280%.  Bonds issued by the company have also seen a material improvement in pricing with the Intelsat Luxembourg SA bonds rising having the largest rally.  The 8.125% Intelsat Luxembourg SA bond maturing in 2023 was in the high 40s when we initiated coverage of the situation and now trades at $81.5
- Capstone LLC -

Washington DC

-Capstone Research Limited-

London