Magazine article American Banker

Big Loan Deals Send Satellite Financing Soaring

Magazine article American Banker

Big Loan Deals Send Satellite Financing Soaring

Article excerpt

Lehman Brothers and Donaldson, Lufkin & Jenrette launched a $475 million leveraged loan package Tuesday for Loral Space and Communication.

The new loan and an expected $295 million high-yield bond issue, also arranged by Donaldson and Lehman, will fund Loral's joint acquisition with its Mexican partner, Telefonica Autry Group, of Mexico's state-owned satellite company, Satelites Mexicanos, SA.

Meanwhile, Citicorp and J.P. Morgan & Co. are readying an $800 million loan package for another satellite company, Panamsat Corp., that is expected to come to market next week.

Lenders and industry observers said 1997 was one of the most active financing years ever for the satellite business, which generated more than $11.6 billion in syndicated loans alone, according to Securities Data Co.

This year should see at least as much financing for the growing satellite industry.

"We anticipate that these two deals (Loral and Panamsat) are the tip of the iceberg for satellite finance in 1998," said Peter Engel, vice president and head of the telecommunications investment banking group at J.P. Morgan in San Francisco.

One of last year's most notable financing deals-a Chase Securities Inc.- led high-yield bond offering last July for satellite communications company Iridium LLC-was such a hit with investors that the issue was raised to $750 million, up from a planned $500 million.

"Our (telecommunications) clients are increasingly interested in hybrid transactions that involve both the bank and public debt markets," Mr. …

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