Al Yah Satellite Communications Company PrJsc (Yahsat), the UAE’s first nationally-owned satellite operator and wholly-owned subsidiary of Mubadala Development Company (Mubadala), received secured commitments for $1.2 billion US to finance the Middle East’s first hybrid satellite communications system. The 14-year non-recourse financing is split into a $1,014 million US term loan, $100 million US of stand-by facilities and a $80 million US in debt service reserve letter of credit. Proof that both international and regional banks providing in excess of $1.6 billion US for the $1.2 billion US financing is a testament to the strength of their sponsorship due to a strong business model. In the final allocations, 14 banks are participating and the margin on the loan starts at 1.1 percent and increases to 1.4 percent in the later years.
In May Yahsat announced that it was approaching the financial market to raise PPP style project finance funding for its satellites. The first satellite Yahsat 1A is currently being built and will be launched in the fourth quarter of 2010. The second satellite, Yahsat 1B, will follow a few months later in the first half of 2011. Yahsat has already started generating sustainable business through recent long term satellite capacity leases with the UAE Armed Forces and the US company Emerging Markets Communications, Inc., operator of one of the largest teleports facilities in the world.
