Globalstar, Inc. announced that it has entered into an amendment to its COFACE facility agreement, which significantly extends the initial principal repayment date beyond 2012 and makes further adjustments to the facility's financial and operating covenants. According to the amendment, the first repayment date will now be as late as June 2013 instead of June 2012. The precise date is dependent on the date of the Company's fourth launch of second-generation satellites and will be the earlier of June 2013 or eight months post-launch.
The amendment includes a significant reduction of the 2011 and 2012 Adjusted Consolidated EBITDA covenants and a change to the required date for the 24th second-generation satellite to be placed into service. Additional adjustments were made to align certain levels and dates with Globalstar's launch schedule.
"We are pleased to announce these important changes to the financing agreement as it provides Globalstar with the added flexibility to complete the four launches of our new satellite constellation, restore our network coverage and begin revenue recovery prior to making principal facility payments," said Jay Monroe, Chairman and CEO of Globalstar, Inc. "I would like to acknowledge and thank both COFACE and members of the French lending group for the consideration they have shown permitting the completion of this milestone amendment."
In June 2009, Globalstar entered into a $586.3 million senior secured credit facility agreement. Ninety-five percent of the Company's obligations under the facility agreement are guaranteed by COFACE, the French export credit agency. The facility bears interest at a floating 6-month LIBOR rate, plus a margin of 2.07% throughDecember 2012, increasing to 2.25% through December 2017 and 2.40% thereafter.