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Yahsat gets $1.2b to fund satellite system

ABU DHABI - A mubadala subsidiary, Al Yah Satellite Communications Company PrJsc (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.

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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. The fourteen-year non-recourse financing is split into a $1.014 billion term loan, $100 million of stand-by facilities and a $80 million in debt service reserve letter of credit.

In May this year Yahsat announced that it is approaching the financial market to raise PPP style project finance funding for its satellites. The first satellite Yahsat 1A is currently being built and will be launched in the fourth quarter of 2010. The second satellite, Yahsat 1B, will follow a few months later in the first half of 2011.

Yahsat has already started generating sustainable business through recent long term satellite capacity leases with the UAE Armed Forces and the US company Emerging Markets Communications, Inc.