Loral Space & Communications bank debt traded up almost 20 points in a single day late last week following a bank meeting. The details of the meeting for the satellite communications company could not be determined, and speculation ran from asset sales to the construction of another satellite. But investors agreed that something is up, as the paper is now quoted in the 80-83 range, up from the low 60s at the start of last week. When the bank debt is marked up 20 points from where it was the day before, it is clearly a sign to the public markets that something is going on, one buysider noted. Calls to Richard Townsend, executive v.p. and cfo, were referred to an investor relations spokeswoman, who declined to comment on the information discussed at the bank meeting as well as the movement in the bank debt.
At the end of March, Loral amended two Bank of America-led credit facilities to modify its financial performance covenants and also to impose certain restrictions, including limits on its capital expenditures. The bank debt includes Loral's $200 million revolver and $355 million term loan. The net book value of the assets that secure the credit is approximately $642 million, according to Loral's most recent 10-Q. The company also has a $200 million revolver and $237.8 million term loan held by its subsidiary, Loral Satellite. The loan under this agreement is secured by certain assets of Loral Satellite, including its Telstar 6 and Telstar 7 satellites, which have been valued in excess of $500 million.
