Loral Space subsidiary gets interim court approval for financing

By Jeff Pines

Washington, April 2 - Loral Space & Communications Ltd.'s Space Systems/Loral Inc. unit obtained interim court approval to obtain a $20 million debtor-in-possession facility through JPMorgan Chase Bank.

The order came in an April 1 filing with the U.S. Bankruptcy Court for the Southern District of New York.

The facility gives the company access to letters of credit for up to $4.2 million at any one time. In its motion for the facility, Space Systems/Loral said it needs to post a $4.2 million bid to a foreign customer by April 5.

Space Systems/Loral designs and manufactures satellites.

The proceeds will be used to keep the company's workers' compensation benefit plans in line with state requirements and for general business purposes.

The facility matures on April 6, 2006. Letters of credit will mature on the earlier of the one-year anniversary of the issuance, renewal or extension of the letter and the date that is five business days before April 6, 2006.

The interest rate will be the Federal Funds effective rate. The letter of credit fee is 25 basis points.

A final hearing on the motion is scheduled for April 13.

The company filed for bankruptcy on July 15, 2003. Loral's Chapter 11 case number is 03-41710.

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