Structure
Closing of acquisition of the North American satellite assets of Loral Space & Communications Corporation and certain of its affiliates.
Strategy
The Intelsat fleet now expands to 27 owned satellites worldwide and the transaction increases our customer base in the cable television and broadcasting segments. This acquisition complements Intelsat`s pre-acquisition network of 23 owned satellites, the Intelsat 10-02 under construction and leased capacity on two additional satellites, by adding four operational satellites, one satellite under construction and six orbital locations that cover the key North American market.
We believe the closing of this transaction will further our strategy of maintaining a global leadership position in a consolidating marketplace for satellite operators.
Purchase price
$961.1 million, which does not reflect expected insurance proceeds (net of currently expected warranty payments) of up to $140 million for the Telstar 4 loss.
Future satellite agreement
In addition, Intelsat paid a deposit of $50 million to SS/L for the purchase of a future satellite.
Assets
Four operational satellites providing North American coverage, one satellite currently under construction, and the rights to six North American orbital locations.
* IA-8 is expected to launch in Q3 2004 and will carry a high-power Ku- and C-Band payload.
* Available slot for future satellite.
* Currently carry traffic for premiere broadcasters, cable television operators and corporate network providers.
* Estimated weighted average remaining orbital manoeuvre life of 16.6 years as of 1 March 2004.
Financing
Citigroup Global Markets Inc, BNP Paribas Securities Corp and Morgan Stanley & Co Incorporated acted as initial purchasers of $400 million in five-year senior notes and $700 million in 10-year senior notes issued in November 2003. Proceeds from the issuance of the senior notes were used to finance the purchase price for the Loral assets.
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