Iridium signs Coface Facility Agreement
October 6, 2010 By Carey Fredericks
Oct. 6, 2010, McLean, Va. - Iridium Communications Inc. has announced that it has signed the definitive Coface Facility Agreement to finance its next-generation satellite constellation, Iridium NEXT.
The syndicate of nine banks is led by Deutsche Bank AG, Banco Santander SA, Société Générale, Natixis and Mediobanca International S.A., and includes BNP Paribas, Crédit Industriel et Commercial, Intesa Sanpaolo S.p.A. and Unicredit Bank Austria AG. They will provide up to $1.8 billion of financing to Iridium for the design and manufacture of Iridium NEXT satellites. The funding under the Facility is subject to customary closing conditions, which are expected to be met shortly.
“Iridium is pleased to have received the backing of such a world class team of financial institutions,” said Matt Desch, CEO, Iridium. “The support of Iridium NEXT by Coface and the banking syndicate is further affirmation of our strength as a global business that consistently demonstrates the ability to provide unparalleled service and unique value to the vast and growing market for mobile satellite services.”
Desch also affirmed that Iridium NEXT continues to be on track. “In the four months since we announced Thales Alenia Space as our prime contractor, they have met the milestones agreed upon for this first phase of the project, and we are off to an excellent start,” Desch said. “Our requirements development process is well underway. Planning and design for the satellites and constellation are on schedule. Both our teams and roster of partners are growing quickly. On the overall Iridium NEXT program, we expect to spend approximately $600 million by the end of 2011. Of this spend, approximately $400 million will be funded under the Facility.”
In addition, Desch commented on current operations. “Our business continues to perform very well across the board, with continued strong growth in subscribers, service and equipment revenues, and Operational EBITDA,” Desch said.
The credit facility consists of two pro rata tranches. One tranche of up to $1.537 billion will bear a fixed interest rate of 4.96 percent per annum. The second tranche of up to $.263 billion will bear a variable interest rated based on LIBOR¹ plus 1.95 percent per annum. Based on the current six-month LIBOR, the interest rate on this tranche would be 2.41 percent per annum. The repayment period of seven years begins following substantial completion of the Iridium NEXT launch program, which is expected to occur in 2017.