Iridium has finally closed the Coface-backed US$1.8bn financing facility for its next generation satellite constellation, Iridium NEXT. The facility is provided by a syndicate of nine banks led by Deutsche Bank, Banco Santander, Société Générale,…
Iridium has finally closed the Coface-backed US$1.8bn financing facility for its next generation satellite constellation, Iridium NEXT.
The facility is provided by a syndicate of nine banks led by Deutsche Bank, Banco Santander, Société Générale, Natixis and Mediobanca International, and including BNP Paribas, Crédit Industriel et Commercial, Intesa Sanpaolo and Unicredit Bank Austria.
The senior secured term loan, which matures in 2024, comprises two pro rata tranches, one of up to US$1.537bn bearing a fixed interest rate of 4.96% a year and the second of up to US$263m bearing a variable interest rated of 195 basis points over LIBOR. The repayment of the debt begins from 2017.
Tom Fitzpatrick, CFO of Iridium stated: “We are extremely pleased with the size of the facility, which together with internally generated cash flow, we continue to believe is sufficient to fully fund our next generation of satellites.
“We are also obviously pleased with the facility’s highly attractive funding cost, long-term nature, and with the covenants and other terms that have been agreed. We are proud to be associated with the pre-eminent group of lenders that have participated in the facility and believe their support speaks well of our future prospects.”
Following the closing of the financing, Iridium’s Full Scale System Development Contract with Thales Alenia Space became effective, replacing the existing Authorization to Proceed.
Iridium has already commenced borrowing under the facility and has drawn approximately US$135m since closing.
The satellite operator expects to pay Thales approximately US$600m, US$400m from the credit facility, by the end of 2011.
Société Générale, Goldman Sachs and Hawkpoint Partners advised Iridium on the financing.
In its Q3 2010 results, Iridium reported a 12% rise in total quarterly revenues to US$94.5m driven by a 10% year-on-year increase in service revenues as well as new M2M equipment and service customers. Operational EBITDA was up 22% for the third quarter from US$38.5m in Q3 2009 to US$47.1m, giving the company an OEBITDA margin of 49%.
However, net income fell by US$4.3m year-on-year to US$10.7m, with Iridium pointing to the US$12.3m of non-cash expenses for purchase accounting adjustments related to GHL Acquisition Corp.’s acquisition.
The results prompted Iridium to up its 2010 guidance, estimating that total billable subscriber growth will be approximately 25% for the year and OEBITDA between US$155m and US$160m compared with previous estimates of US$150m.
Matt Desch, Iridium’s chief executive officer said: “We are working with Thales Alenia Space, SpaceX and all of our technical partners to meet the design and development timelines. Now that we’ve closed on our financing, we’re also accelerating our effort with potential hosted payload customers and continue to make good progress in this area.”
