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Telesat Downgraded to CC by S&P
May 26, 2026
Telesat Geo Inc. (formerly Telesat Canada, Telesat) was downgraded by a notch to CC from CCC- by S&P. The downgrade reflects the severe liquidity distress the company is facing. Telesat has ~CAD 2.3bn ($1.7bn) in current debt obligations. This includes a CAD 1.8bn ($1.3bn) term loan and CAD 538mn ($389.7mn) in senior secured notes, both maturing in December 2026, followed by additional note maturities in mid-to-late 2027. S&P has expressed near-certainty that Telesat will be unable to repay these obligations in full at maturity. The core driver of this distress is a sharp and accelerating decline in Telesat’s legacy GEO satellite business. Revenues fell 29% YoY in 1Q2026 due to expired satellite contracts and weaker renewal terms, compounded by falling revenues in its enterprise and consulting segments. EBITDA is also expected to deteriorate further in 2026. While the GEO business still generates some positive free cash flow, it is insufficient to cover interest expenses and looming debt maturities. The company also has very limited access to capital markets, making a traditional at-par refinancing highly unlikely.
Its 5.625% 2026s were stable at 86.3 cents on the dollar, yielding 36.7%
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