Summary
Globalstar, Inc. has announced a significant financing transaction through the issuance of $200.0 million in aggregate principal amount of 13% Senior Notes due 2029. This private placement, facilitated by Värde Partners and other purchasers, is intended to strengthen the company's financial position. The net proceeds are earmarked for repaying approximately $148 million in outstanding obligations under its 2019 Facility Agreement, covering associated fees, and for general corporate purposes. This refinancing is a crucial step for Globalstar, as it will allow for the release of existing security interests and liens tied to the 2019 Facility. Subsequently, the company will grant similar first lien security interests to its Partner to secure amounts under its Prepayment Agreement. Following these actions, Partner will disburse funds to Globalstar for payments related to the Satellite Procurement Agreement. The new Notes carry a substantial 13% annual interest rate, with flexibility in payment structure, including a significant portion that can be paid-in-kind (PIK).
Key Highlights
- 1Globalstar issued $200.0 million in 13% Senior Notes due 2029 via a private placement.
- 2Proceeds will be used to repay $148 million of outstanding debt under the 2019 Facility Agreement.
- 3The transaction will result in the release of existing liens and the granting of new liens to a 'Partner'.
- 4Funds from 'Partner' will be disbursed for payments under the Satellite Procurement Agreement.
- 5The Notes bear a high interest rate of 13% per annum, with a split cash/PIK payment structure.
- 6The Notes have a stated maturity of September 15, 2029.
- 7The issue price of the Notes is 95% of the principal amount, implying a discount.