About less than a decade ago Export Credit used to be the major source of financing among satellite businesses. This fact is slowly fading away as aggressive investments from different private financing companies is replacing export credit’s role in the industry. Commercial satellite business was mostly fueled by ECAs throughout the first half of the decade, especially for the various systems that didn’t get any financing without their help.
CFO of Iridium, Tom Fitzpatrick said that commercial satellite business wouldn’t have been possible without financing from export credits. While announcing their $3 billion project called the Iridium Next at the World Satellite Business Week, he also said that Iridium’s finances weren’t strong enough at the time of incorporation and they wouldn’t have gone for such missions without ECAs.
Iridium Next involves construction of multiple satellites which will be done by Thales Alenia Space and the project is funded by a French ECA called the Bpifrance Assurance Export.
According to IMG Bank’s Wim Steenbakkers, ECAs provided funds to satellite business when they limited options and companies struggled to raise funds for their operations.
Recent years have seen a decline on ECAs involvements in the satellite funding. A major reason behind this is the fact that Ex-Im was sidelined from the satellite business funding due to issues in authority and lack of quorum over the Directors of the bank. Apart from this a lot of major ECAs have withdrawn themselves from the satellite industry according to Steenbakkers.
There are still uncertainties about the future of Ex-Im as their authorization is about to expire. A group of senators have asked to renew the authorization but the Senate is yet to take a decision over the topic as they were away for summer recess. As Iridium closes in on the deployment of their Iridium Next, they will be looking to strengthen their finances by refinancing their current export credit facilities.