TAMPA, Fla. — Canada is prepared to invest 50% more than initially planned to help flagship geostationary operator Telesat fund its Lightspeed low Earth orbit (LEO) broadband constellation.
Telesat said it received a letter from the Canadian government last week that agreed terms for a loan worth 2.14 billion Canadian dollars ($1.6 billion) for Lightspeed, nearly half the 198-satellite network’s $3.5 billion budget.
The terms also include an exchange of warrants enabling the government to buy 10% of Lightspeed for $300 million, valuing the constellation at $3 billion ahead of satellite deployments slated to get underway in 2026 via SpaceX.
The deal supersedes a provisional 1.44 billion Canadian dollar investment agreement reached in August 2021, which consisted of a 790 million Canadian dollar loan and 650 million Canadian dollars in preferred equity upfront.
The new loan would carry a floating interest rate of 4.75% above the Canadian Overnight Repo Rate Average (CORRA), compared with a rate fixed at 2% a year under the earlier plan. Telesat would also have 15 years to pay off the loan, compared with 20 years before.
Telesat said April 1 the proposed investment remains subject to various conditions, including definitive documentation, and whether the government is satisfied with other financing sources in the works for the satellites Canada-based MDA is building.
The agreement comes after Telesat switched manufacturers in August following production delays at Europe’s Thales Alenia Space.
The satellites from MDA are 75% smaller at 750 kilograms but promise the same performance, helping the operator shave $2 billion off Lightspeed’s original budget.
Telesat CEO Dan Goldberg said April 1 that the government investment will also help the company save $750 million in borrowing costs.
Stephen Hampton, Telesat’s senior director for government affairs and public policy, said export credit agencies (ECAs) in Canada and…
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