Issue #48 - March 10, 2003

Financial          

Sirius Completed Debt for Equity Exchange

Sirius Satellite Radio announced that 91% of its bondholders agreed to exchange their debt for common stock, a requirement for completing a $1.4-billion financing plan.

The plan approved by the company's stockholders calls for the sale of $200 million of newly issued common stock and the exchange of $519 million in preferred stock for common stock and warrants. Sirius expects to complete the restructuring this week.

The financing will allow Sirius to continue operating into the second quarter of next year, the company said.

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Hughes and DirecTV Complete Refinancing

Hughes and DIRECTV completed its $3.1 billion refinancing of secured credit facilities and senior notes. The size of the facilities was increased to $1.675 billion from the previously announced $1.55 billion. In addition to the senior secured credit facilities, DIRECTV closed a $1.4 billion senior notes offering on February 28, 2003.

The senior secured credit facilities consist of a $250 million five-year revolving credit facility, a $375 million five-year Term A loan and a $1.05 billion seven-year Term B loan. The facilities are secured by substantially all of DIRECTV's assets and are guaranteed by all of DIRECTV's domestic subsidiaries.

The $1.4 billion senior notes were offered in a Rule 144(A) / Regulation S private placement and bear interest at an 8.375% annual rate, payable semi-annually. The notes will mature on March 15, 2013 and are callable on or after March 15, 2008. The notes are guaranteed by all of DIRECTV's domestic subsidiaries.

After consideration of the undrawn revolving credit facility and payment of transaction fees, approximately $2.75 billion of the proceeds from the financing will be paid to Hughes in a distribution that will be used to repay $506 million of outstanding short-term debt, fund Hughes' business plan through projected cash flow breakeven and for Hughes' other corporate purposes.

"This financing was very well received by the market and we are pleased with its successful completion," said Michael J. Gaines, Hughes' chief financial officer. "Due to DIRECTV's strong financial results and outlook, there was significant demand for our offering from a broad group of investors. These two transactions provide Hughes with significant long-term incremental liquidity and complement the long-term financing completed at PanAmSat this time last year. In addition, we have strengthened our financial position by extending the average maturity of our debt to more than seven years at what we consider to be very attractive interest rates."

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Globalstar Receives Final Approval of Debtor-in-Possession Financing

U.S. Bankruptcy Court in Delaware has granted final approval of the Globalstar's $10 million debtor-in-possession credit facility. The Court had earlier granted approval on an interim basis, making an initial $4 million available to the company, and yesterday's approval will lead to the release of the remaining $6 million, subject to the terms of the DIP loan agreement.

In the meantime, Globalstar is continuing its process of identifying potential bidders for the company, with final selection, subject to court approval, expected to be completed by early April.

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