Inmarsat turns to EIB for Alphasat financing

Inmarsat has secured an E225m financing agreement with the European Investment Bank (EIB) for the manufacture and launch of its next generation spacecraft Alphasat.
The arrangement allows Inmarsat to draw down up to E225m from the eight-year facility….

Inmarsat has secured an E225m financing agreement with the European Investment Bank (EIB) for the manufacture and launch of its next generation spacecraft Alphasat.

The arrangement allows Inmarsat to draw down up to E225m from the eight-year facility. The company plans to make its initial draw down in the second quarter of this year.

The EIB financing will rank as senior secured creditor of the Inmarsat subsidiary Inmarsat Investments Limited. Inmarsat did not release any further details on the facility and did not use an external advisor for the transaction.

An Inmarsat spokesman told SatelliteFinance: “It’s a fundamentally attractive proposition. They are providing Triple A funding and passing it to corporate borrowers. We’re getting funding that would otherwise be inaccessible in the corporate debt markets.”

The E225m financing is drawn from the EIB and the European Commission’s Joint Risk-sharing Finance Facility. This is backed by E1bn in funds from the European Union’s 7th research framework program, and E1bn from the EIB’s own resources.

Alphasat will cost E598m in total. The European Space Agency (ESA) is contributing E230m through the provision of the Alphabus platform it is developing in conjunction with the French space agency CNES.

EIB President Philippe Maystadt said: “This confirms the EIB’s long-standing support to Europe’s space industry. This satellite will put European industry in a leading position in this segment and could bring significant spill-over effects for research and innovation in Europe. This is the type of investment the EIB intends to finance further under the Europe 2020 initiative.”

Inmarsat expects Alphasat to be delivered in late 2012. The satellite will be one of the largest ever built, weighing over 6000 kilograms. It serves a dual purpose as the test run for the Alphabus platform and, through the advanced L-Band payload it carries, an augmentation of the existing Intelsat-4 class fleet.

Inmarsat’s spokesman did not rule out returning to EIB or equivalent financing if the company decides to go forward with its S-Band project Europasat.

“Like a lot of corporates we are looking for advantageous sources of funding,” he said. “We would expect to do so when and if Europasat comes along. But, Europasat is likely to be a different structure. Alphasat is part of the core business, it’s pari passu with our corporate debt. We would anticipate something on a stand alone basis for Europasat, reflecting that it’s a new venture.”