Summary
Globalstar, Inc. has announced the full repayment of its First Lien Credit Facility on November 8, 2021, totaling approximately $62.0 million. This repayment was primarily funded by drawing down $51.1 million from its debt service reserve account, with the remainder coming from existing cash on hand. The termination of the First Lien Credit Facility also triggers an automatic upgrade of Globalstar's Second Lien Term Loan Facility to a first lien position, which had an outstanding principal of approximately $255.0 million as of September 30, 2021. The company anticipates receiving a refund of roughly $2.5 million in insurance premiums related to the now-terminated facility.
Key Highlights
- 1Globalstar fully repaid its First Lien Credit Facility for approximately $62.0 million on November 8, 2021.
- 2The repayment utilized $51.1 million from the debt service reserve account and the rest from cash on hand.
- 3The First Lien Credit Facility has been terminated.
- 4The Second Lien Term Loan Facility's collateral status automatically upgraded to first lien upon the termination of the First Lien Credit Facility.
- 5The Second Lien Term Loan Facility had an outstanding principal of approximately $255.0 million as of September 30, 2021.
- 6Globalstar expects to receive a refund of approximately $2.5 million in insurance premiums.
Frequently Asked Questions
The repayment of the First Lien Credit Facility signifies a deleveraging event for Globalstar and removes a layer of debt. Crucially, it elevates the collateral position of the Second Lien Term Loan Facility to a first lien status, potentially improving its security and making the company's capital structure simpler.
The repayment was funded using approximately $51.1 million from the company's debt service reserve account and the remaining balance from Globalstar's existing cash on hand.
Upon the termination of the First Lien Credit Facility and the release of its liens, the liens securing the Second Lien Term Loan Facility automatically became first liens. This strengthens the position of the second lien debt.
Yes, Globalstar expects to receive a refund of approximately $2.5 million in insurance premiums that were paid in connection with the First Lien Credit Facility.