Loral Space & Communications has taken early action to extend to 2005 the maturities of both of its major bank credit facilities, the $600 million Loral SpaceCom facility and the $494 million Loral Satellite facility. In addition, the company obtained significant improvements in the amortization schedules. All lenders agreed to these revised terms which were signed off the day before Christmas.

Bernard L. Schwartz, chairman and chief executive officer of Loral, said, “The support demonstrated by the bank groups, which include several of the world’s largest banks, is very gratifying. The early action taken to amend these credit facilities represents the third step we have taken in 2001 to bolster Loral’s financial strength.

“Just last week (Dec 21) we completed the Loral CyberStar debt exchange offer, reducing debt by approximately $225 million and Loral’s annual cash interest payment by $38 million. And, in April, Loral concluded a preferred stock exchange offer resulting in savings of approximately $17 million annually in preferred dividend payments through 2007 and $279 million in mandatory redemptions in 2006 and 2007.

“The extended maturities and revised amortization schedules established under the amended facilities support the currently underway expansion of our high-margin, fixed satellite services business. The company will increase the size of its Loral Skynet fleet with the launch in late-2002 and early-2003 of several new satellites.”

    Additional information on the amended facilities:

  • The final maturity for the $600 million Loral SpaceCom credit facility was extended from November 2002 to January 2005.
  • The final maturity for the $494 million Loral Satellite credit facility was extended from August 2003 to January 2005.
  • Amortization payments are as follows: $85 million for 2002; $65 million for 2003; and $94 million for 2004.
  • This reduces scheduled principal payments for the two facilities by $25 million and $535 million in 2001 and 2002, respectively, somewhat offset by higher agreed-to interest payments.
  • Loral increased the collateral supporting the credit facilities.
  • There were no changes to the principal amounts of the facilities.

For the Loral SpaceCom credit facility, Banc of America Securities and Deutsche Banc Alex Brown served as co-lead arrangers and, along with Credit Lyonnais, served as joint book running managers.

For the Loral Satellite credit facility Banc of America Securities LLC and Credit Lyonnais served as co-lead arrangers and joint book running managers.