Iridium Secures Favorable Rate on Coface Loan
[Satellite TODAY 08-06-10] Iridium Communications has received interest rate commitments on the $1.8 billion credit facility it secured with French credit export agency Coface and a syndicate of international banks in June to finance the construction of the company’s next-generation satellite constellation, Iridium Next, the operator announced Aug. 5.
The facility will bear an interest rate of less than 6 percent, the majority of which will be fixed rate and will have a repayment term from 2017 through 2024. Iridium expects to sign the credit facility in September and close shortly thereafter.
“This represents another important milestone for Iridium, and we are extremely pleased with the interest in our facility and corresponding support for Iridium. The development of Iridium Next is in full swing with our prime contractor, Thales Alenia Space, and we’re on target to launch the first Iridium Next satellites in early 2015,” Iridium CEO Matt Desch said in a statement.
Raymond James Analyst Chris Quilty said Iridium secured a favorable interest rate on its Coface loan. “Iridium’s financing puzzle is now effectively solved. The company’s cost of money is well below what we had originally modeled (a 9 percent borrowing cost), and the favorable repayment terms will further-boost Iridium’s near-term cash flows. The only remaining questions are: When, exactly, will the deal close, and just how cheap will the package be?”
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