AST SpaceMobile unit enters two loan agreements totaling $115 million

By William Gullotti

Buffalo, N.Y., Aug. 15 – AST SpaceMobile, Inc., via wholly owned subsidiary AST & Science, LLC, entered two term loan facilities totaling $115 million, according to an 8-K filing with the Securities and Exchange Commission.

The facilities include a $100 million senior secured term loan agreement with ACP Post Oak Credit II LLC as administrative agent and collateral agent signed Aug. 14 and a $15 million term loan agreement with Lone Star State Bank of West Texas on Aug. 9.

The $100 million secured term loan matures Aug. 14, 2026.

AST borrowed $48.5 million at closing, resulting in net proceeds of $37.3 million. The initial draw incurred net placement agent fees and offering expenses totaling $2 million. The company also deposited $1.8 million into an interest reserve escrow account and prepaid two years of insurance premium totaling $7.4 million.

The $48.5 million drawn bears fixed interest at SOFR plus a 962.5 basis point margin, or 14.75%.

The remaining $51.5 million may be drawn only if the company raises additional capital and receives additional interest coverage equal to the facility borrowings. The borrower may then, at its election, opt to have those borrowings bear interest at the same fixed rate or as a floating-rate loan.

Atlas Credit Partners, LLC is the lender for the secured agreement.

The agreement is subject to a change in control, permitting the lender to immediately redeem all outstanding borrowings at 101% of the balance plus a call premium, as well as accrued and unpaid interest.

The $15 million term loan with Lone Star, featuring an availability period that expires March 1, 2025, will mature Jan. 1, 2029. Interest payments will commence on Aug. 14, 2024, with principal payments beginning on April 14, 2025.

Borrowings under the Lone Star term loan will accrue interest at the prime rate plus 75 bps, subject to an undisclosed ceiling rate.

In connection with the Lone Star agreement, the company deposited a cash balance of $15 million in the Lone Star Bank Money Market Fund. The cash balance will be converted to restricted cash if the company fails to maintain a balance of cash and cash equivalents, on a consolidated basis, of at least $75 million. This restricted cash will be used to offset against the term loan obligations if the company fails to maintain a balance of cash and cash equivalents, on a consolidated basis, of at least $50 million.

In addition, the covenants for the Lone Star agreement also require the company to retain its current chief executive officer.

AST SpaceMobile is a satellite designer and manufacturer based in Midland, Tex., focused on building a space-based cellular broadband network to allow existing, unmodified smartphones to connect to satellites in areas with coverage gaps.

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