MSS operator Globalstar has secured an amendment to its Coface-backed US$586.3m senior secured credit facility, extending the initial repayment date by a year as well as makes further adjustments to the loan’s financial and operating covenants.
Under…
MSS operator Globalstar has secured an amendment to its Coface-backed US$586.3m senior secured credit facility, extending the initial repayment date by a year as well as makes further adjustments to the loan’s financial and operating covenants.
Under the deal struck with its French lenders, BNP Paribas, Credit Agricole, Credit Industriel et Commercial, Natixis and Societe Generale, Globalstar will now make the first repayment of the loan prior to June 2013 instead of June 2012. The precise date is dependent on the date of the company’s fourth launch of second-generation satellites and will be the earlier of June 2013 or eight months post-launch.
In addition, the covenants connected to Globalstar’s 2011 and 2012 EBITDA requirements have been reduced, while the required date for the 24th next generation satellite to be placed into service has been extended.
SatelliteFinance understands that the amendments were not the result of Globalstar getting close to breaching any of its covenants but were technical and connected to the launch schedule of the second generation constellation.
Commenting on the amendment, Jay Monroe, chairman and CEO of Globalstar, said: “We are pleased to announce these important changes to the financing agreement as it provides Globalstar with the added flexibility to complete the four launches of our new satellite constellation, restore our network coverage and begin revenue recovery prior to making principal facility payments. I would like to acknowledge and thank both Coface and members of the French lending group for the consideration they have shown permitting the completion of this milestone amendment.”
The US$586.3m credit facility, which Globalstar secured back in June 2009, matures in December 2019 and bears interest at a floating 6-month LIBOR rate, capped at 4%, plus a margin of 2.07% through December 2012, increasing to 2.25% through December 2017 and 2.40% thereafter.
The first batch of six next generation satellites was launched in October 2010 with the second batch launched in July 2011 following a two month delay. The third batch of satellites was then placed into orbit at the end of 2011 having originally being slated to be launched in October 2011. The delays were the result of the momentum wheels defects that affected the first batch of six satellites and led to one being removed from service. This prompted the satellites’ manufacturer Thales Alenia Space and Globalstar to put the launches on hold in order to make sure the problem did not reoccur.
The final six satellites are due to be launched by an Arianespace Soyuz rocket in the second quarter of 2012.
