Loral agrees to hire a financial officer to communicate with lenders; amends loans

By Sara Rosenberg

New York, March 31 - Loral Space & Communications Ltd. has agreed to hire a financial officer to work closely with management and communicate with bank lenders, according to a filing with the Securities and Exchange Commission. The decision to hire a financial officer was made in connection with the amendment of credit agreements for Loral Satellite Inc. and Loral Space & Communications credit agreements.

In addition, the company agreed to the continued retention of a financial advisor to assist in various matters, including advising on strategic alternatives, which may include asset sales and other actions to reduce indebtedness, according to the filing.

The Loral Satellite credit facility was amended on Monday, increasing interest on outstanding loans by 50 basis points, reducing the maximum Libor period to three months, adding minimum cumulative EBITDA and minimum cash balance requirements and increasing the circumstances under which mandatory prepayment of the loans are required. Furthermore, Loral Satellite's ability to make dividend payments has been substantially reduced by only allowing dividends or loans to its parent or Loral if they are used for payments on Loral's 9.5% senior notes or to pay a maximum of $5 million on an intercompany note between Loral and Loral SpaceCom Corp.

The Loral Space & Communications credit facility was also amended on Monday. Under the amendment, the interest rate was increased by 50 basis points, the maximum Libor period was reduced to three months, minimum cumulative EBITDA and cash balance requirements were added and circumstances under which mandatory prepayment of the loans are required were increased. Furthermore, additional restrictions were placed on LSC's ability to incur capital expenditures, sell assets, incur debt, provide vendor financing and make investments.

Loral, based in New York, operates with its subsidiaries as a satellite communications company with substantial activities in satellite-based communications services and satellite manufacturing.

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