[Satellite News 06-21-10] Questions over the financial feasibility of global MSS satellite company Iridium Communications’ Iridium Next constellation have been answered by the securing of a $1.8 billion credit facility from Coface on June 2, which has enabled Iridium to award some of the industry’s largest contracts in history to build and launch the ambitious project.
    The Coface guarantee is being syndicated through French and other major international banks and financial institutions and is not conditioned on Iridium raising any further debt or equity financing. Iridium expects financing to be completed this summer.
    Coface has injected over $2 billion in the MSS sector over the past two years, including a $738 million credit facility to GlobalStar in March 2009. The French credit export agency’s involvement in the sector has benefited manufacturer Thales Alenia Space, which was immediately awarded a fixed price contract for the design and construction of satellites for the Iridium Next constellation following the financing agreement.
    Thales Alenia Space will build 72 operational satellites and in-orbit spares for Iridium Next with an additional nine ground spares to provide greater risk mitigation. The MSS operator also entered into an authorization to proceed with Thales Alenia Space, which allows the manufacturer to immediately commence work on the development of satellites prior to completion of the financing. Thales Alenia Space also is manufacturing Globalstar’s next-generation satellite fleet. The Coface financing in the Globalstar deal, which paid for at least 24 of the four dozen satellites Globalstar previously ordered from Thales, was used to facilitate long-lead items connected with the accelerated delivery of second-generation satellites, the completion of next-generation ground facilities and the design of satellite interface chipsets.
     Iridium CEO Matt Desch said the financing structure it secured with Coface exceeded the company’s expectations. “In addition, the Coface guarantee enables Iridium to secure attractive and flexible low cost financing for the project. Based on the amount of this guarantee, we expect Iridium Next to be fully funded when the financing is finalized this summer. This is a critical step in maintaining our customers’ and partners’ confidence that Iridium will keep delivering innovative products and services globally through the coming decades.”
    Thales Alenia Space CEO Reynald Seznec said his company would form partnerships with a consortium of international technical partners to cover the large-scale mission. “We expect 40 percent of the work for Iridium Next to be subcontracted to North America companies,” Seznec said in a statement.
    To launch the constellation, Iridium issued a $492 million contract to SpaceX on June 16 to carry multiple Iridium Next constellation satellites on Falcon 9 rockets. The deal, which represents the largest commercial launch contract to date, comes fresh off of SpaceX’s successful debut launch of the Falcon 9 rocket on June 4. Over a two-year period starting in early 2015, SpaceX will insert the satellites into a low-earth orbit (LEO) from the Vandenberg Air Force Base (VAFB) in California. Launch services are included in the total estimated cost of $2.9 billion for Iridium Next.
    “This is the third major building block on the road to Iridium Next,” said Matt Desch, CEO of Iridium. “Two weeks ago, we announced our fixed-price contract with Thales Alenia Space. We also announced our Coface-backed financing plan, and today I am pleased to announce our partnership with SpaceX for extremely cost-effective launch services.”
    Desch said SpaceX offered dedicated launch slots within its manifest, which currently has 24 Falcon 9 flights scheduled, including those for commercial and government customers, during the next five years. SpaceX launched its debut Falcon-9 rocket on June 4 and achieved Earth orbit, marking a successful inaugural performance for the highly anticipated medium-lift launch vehicle.
    Iridium expects the total cost of the Next constellation’s development, manufacture and launch to be approximately $2.9 billion. The first constellation satellites are scheduled for launch in the first quarter of 2015.