The satellite industry dominates the US Export-Import Bank’s structured finance lending for 2011. The ECA has so far authorised approximately US$1.066bn of loans for structured finance projects, all of which are satellite-based.
The largest portion of…
The satellite industry dominates the US Export-Import Bank’s structured finance lending for 2011. The ECA has so far authorised approximately US$1.066bn of loans for structured finance projects, all of which are satellite-based.
The largest portion of this is the US$666m that is to be lent to Inmarsat to help fund the construction and launch of the MSS operator’s planned three satellite Ka-band constellation.
Inmarsat has estimated that the total cost of its next generation service, entitled Global Xpress and comprising three Ka-band Inmarsat-5 satellites, will be US$1.2bn over the next four years. The satellite operator contracted Boeing to manufacture the spacecraft and the US aerospace giant has played a key role in helping Inmarsat secure ExIm backing.
Inmarsat filed an application with ExIm in September and following a board meeting by the latter in November, the application was referred to the US Congress where it was subsequently approved in December. ING is understood to have been mandated by Inmarsat to manage the ECA process.
Inmarsat CFO Rick Medlock previously said that the company intended to fund much of the Global Xpress project through internally generated cash flows. As of June 30, 2010, Inmarsat had over US$400m of available liquidity.
Another global player that has tapped ExIm Bank support is SES. The FSS operator has secured a US$171.5m 8.5 year loan to help finance the construction and launch insurance of the QuetzSat-1 satellite. Again ING was managing the application for SES.
The 32-transponder bird, which is due to be launched by ILS in 2011 and will be located at 77W, is being constructed by California-based Space Systems Loral. ISB is placing the insurance as it is with the Inmarsat-5 satellites.
The entire capacity of QuetzSat-1 has been leased by EchoStar which in turn will provide DISH Mexico, its Mexican DTH joint venture with local media conglomerate MVS Comunicaciones, with eight Ku band transponders. The remaining 24 transponders will be leased to EchoStar’s sister company, the US DTH provider DISH Network.
Under the agreement between EchoStar and SES, the former is making certain upfront payments to SES to help fund the construction of the satellite and will then make monthly payments for the remainder of the satellite’s service term.
Finally, the Spanish satellite operator Hispasat has netted a US$228m loan for the construction of the Amazonas-3 satellite, which is also being built by Space Systems Loral.
This is not the first time that Hispasat has sought to tap the US export credit agency having received a US$175m 8.6 year structured finance loan in 2010. That facility was tied to the construction of the Hispasat 1E satellite by Space Systems Loral. Banco Bilbao Vizcaya Argentaria (BBVA) and BNP Paribas arranged the transaction for Hispasat.
The other satellite operator that obtained ExIm support in 2010 was UK-based operator Avanti, which secured a US$215.6m 7-year project financing to support the construction and launch insurance of Hylas-2. Orbital Sciences is building the satellite, while Marsh is placing the insurance.
