Starlink Rival SES Sells ‘Space Bonds’ Ranked Lower Than Hybrids

European satellite communications operator SES SA is undertaking a bold financial maneuver that underscores the mounting pressure facing traditional space infrastructure providers in an era dominated by Starlink and next-generation low-earth-orbit (LEO) networks. The Luxembourg-based company has launched an unusual hybrid bond offering—securities that rank structurally below conventional hybrid instruments—as part of a strategic effort to restore its investment-grade credit rating and shore up its balance sheet against competitive headwinds. This financing move reveals the deeper challenges confronting established European satellite operators as they grapple with technological disruption, shrinking margins, and the need for massive capital investment to remain competitive. SES, which operates primarily geostationary satellite (GEO) networks that have historically dominated international communications and broadcasting, now faces existential pressure from Starlink's rapidly expanding constellation of LEO satellites promising lower latency and global coverage. The company's hybrid bond strategy is particularly telling. By issuing securities ranked lower in the capital structure than traditional hybrids, SES is attempting to convince credit rating agencies that its equity base is stronger than current metrics suggest. This architectural approach aims to trigger a ratings upgrade without dramatically diluting existing shareholders. For a company that once enjoyed premium credit ratings, this maneuver represents both a