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Iridium amends credit facility to delay repayments, adjust covenants
By Tali Rackner
Minneapolis, March 9 – Iridium Communications Inc. and Iridium Satellite LLC expect to enter into an amendment to their $1.8 billion credit facility, according to an 8-K filed Friday with the Securities and Exchange Commission.
Under the amendment, the lenders will agree to delay a portion of the principal repayments scheduled for 2018, 2019 and 2020 into 2023 and 2024 pursuant to an amended repayment installment schedule and adjust Iridium Satellite’s financial covenants.
In addition, the amendment allows for the company to conduct an offering of $360 million senior notes due 2023, the proceeds of which will be used to repay bills of exchange under a July 27, 2017 Full Scale System Development Contract No. ID-10-021.
Also, after funding of the debt service reserve account back to $189 million, Iridium Satellite will now be able to access up to $87 million from the debt service reserve account under the credit facility in the future if its projected cash level falls below $75 million.
Under the amendment, in the event that (a) Iridium Satellite receives hosting fees from Aireon LLC; or (b) Iridium Satellite’s cash balance exceeds $140 million after Sept. 30, 2019, Iridium Satellite would be required to use those hosting fees or excess cash (including up to $200 million of hosting fees) to prepay the credit facility.
In addition, if any notes remain outstanding six months before their maturity, the maturity of all amounts remaining outstanding under the credit facility would be accelerated to that date from Sept. 30, 2024.
Iridium is a McLean, Va.-based mobile satellite service company.
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