Yahsat secures $1.2b for satellite system
Al Yah Satellite Communications Company (Yahsat), the UAE's first nationally owned satellite operator, has secured commitments for $1.2 billion to finance the Middle East's first hybrid satellite communications system.
The 14-year non-recourse financing is split into a $1.01 billion term loan, $100 million of stand-by facilities and $80 million in debt service reserve letter of credit.
In the final allocations, 14 banks are participating and the margin on the loan starts at 1.1 per cent and increases to 1.4 per cent in the later years.
"Yahsat received commitments from leading international and regional banks in excess of $1.6 billion for the $1.2 billion financing," said Jasem Mohammad Al Za'abi, chief executive of Yahsat, a wholly owned subsidiary of Mubadala Development Company, an Abu Dhabi-based investment firm.
Samer Khalifa, chief fin-ancial officer of the operator, added: "The success of this transaction is an important endorsement of Yahsat, given the challenging global financial environment."
In May this year, the operator, supported by an investment of $1.7 billion, approached the financial market to raise funding for its satellites.
"The deal is not only oversubscribed but has very competitive pricing and set structuring benchmarks for the region," said Derek Rozycki, executive director, project and corporate finance at Mubadala.
The company is already building its first satellite, Yahsat A, which is set to be launched in 2010, and another satellite, Yahsat B, will follow a few months later in the first half of 2011. The satellites will provide coverage to 85 countries in the Middle East, Europe, and South West Asia.
The operator has already started generating sustainable business.
Multiple transponders have been leased by the UAE Armed Forces on both Yahsat A and B on a long-term basis. And the US company Emerging Markets Communication, international operator of a teleports facility, leased multiple transponders on the C-band in Yahsat 1A, company officials told Gulf News.
