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Satnews Daily
November 5th, 2019

Iridium Obtains a New Credit Agreement for Additional Financial Flexibility


Iridium Communications Inc. (Nasdaq: IRDM) has closed a $1.45 billion, seven-year term loan that sets the stage for the company to complete their financial transformation.

The new credit agreement formally retires Iridium’s previous credit facility initiated in 2010 and guaranteed by BPI France (formerly COFACE), which enabled Iridium to finance the Iridium® NEXT program.  An additional $100 million, five-year revolving loan facility is also included in the new agreement.

The new term-loan offering was significantly oversubscribed and, as a result, achieved favorable terms, including an interest rate of LIBOR plus 3.75% with a 0.5% original issue discount. The success of the offering highlighted the company’s position as a unique investment opportunity, showing its rare combination of growth and levered free cash flow generation.  The term loan provides Iridium added financial flexibility to consider shareholder-friendly activities, including share buybacks, dividends and opportunistic strategic investments, coincident with anticipated reductions in net leverage.

Deutsche Bank AG New York Branch is serving as Administrative Agent and Collateral Agent, while Deutsche Bank Securities Inc., Barclays Bank PLC, Credit Suisse Loan Funding LLC, Wells Fargo Securities, LLC and Société Générale acted as joint lead arrangers and bookrunners.

Tom Fitzpatrick, CFO, Iridium, said this transaction simplifies Iridium’s capital structure and adds financial flexibility to benefit the company's shareholders. As the firm continues to de-lever the balance sheet, Iridium and the shareholders will increasingly see the fruits of the financial transformation the company has been working toward.

Matt Desch, CEO, Iridium, add that this year has been filled with many major milestones for Iridium, including completion of the Iridium NEXT program, launching of Iridium Certus® broadband service, the signing of a seven-year contract with the U.S. government and many more. The refinancing of the company's credit facility is perhaps the most significant financial development for Iridium since the signing of the BPI export credit facility about a decade ago that launched the Iridium network evolution.  This was the final step in the company's financial transformation and unlocks benefits for Iridium and its shareholders.