Loral Space & Communications bank debt traded in the 96-97 context last week after the company received an informal offer from EchoStar Communications Corp. to purchase six North American satellites for about $1.05 billion. Loral has already reached a definitive agreement to sell the satellites to Intelsat for approximately $1.1 billion in cash. The sale of the satellites to Intelsat was approved by antitrust regulators last week. "It looks like something is going to happen here," said one trader. The bank debt was a touch stronger from the 942/3 - 952/3 level where it was quoted at the beginning of last week, according to LoanX.
Proceeds from the sale of the satellites are expected to be directed toward paying down the company's $959 million in outstanding secured bank debt. The company filed for bankruptcy in July to facilitate the sale. Loral will evaluate any bids for the satellites in accordance with the bidding procedures approved by the bankruptcy court last Monday. If there is more than one bidder there will be an auction of the assets in October, explained Harvey Miller, a managing director at Greenhill and a financial advisor to Loral. EchoStar also has indicated an interest in acquiring the balance of Loral's fixed satellite services fleet and its satellite manufacturing assets for about $450 million. Calls to a Loral spokesman were not returned by press time.