[Satellite TODAY Insider 10-06-10] Iridium closed its $1.8 billion credit facility agreement with Coface at lower interest rates than Iridium’s management expected, the company announced Oct. 4.
    The blended interest rate for the facility, which Iridium will use to finance its second-generation satellite constellation, Iridium Next, is 4.6 percent, excluding fees and other financing costs. The loan is separated into two separate payment structures, with $1.537 billion of the total carrying a fixed yearly interest rate of 4.96 percent and $263 million with a variable interest rated based on the London Interbank Offered Rate plus 1.95 percent per year, which combines to about 2.41 percent.
    When the deal was first announced in August, Iridium management issued a guidance of about 6 percent.
    The funding is backed from a syndicate of nine banks led by Deutsche Bank, Banco Santander, Société Générale, Natixis and Mediobanca International, and includes BNP Paribas, Crédit Industriel et Commercial, Intesa Sanpaolo and Unicredit Bank Austria.
    Iridium, with reported cash and equivalents of $121 million and no substantial debt, now expects to spend about $600 million on the Next program through the end of 2011. about $400 million of that total will be funded through the facility.
    CEO Matt Desch said Iridium Next is on track. “In the four months since we announced Thales Alenia Space as our prime contractor, they have met the milestones agreed upon for this first phase of the project, and we are off to an excellent start. Our requirements development process is well underway. Planning and design for the satellites and constellation are on schedule. Both our teams and roster of partners are growing quickly.”
    Iridium Next is scheduled to launch in the first quarter of 2015. Iridium’s seven-year credit facility repayment period begins following the substantial completion of the Iridium Next launch program, which is expected to occur in 2017.

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