Satmex gets waivers from holders of first-, second-priority notes

By Jennifer Chiou

New York, May 10 - Satelites Mexicanos, SA de CV obtained waivers from holders of a majority of its first-priority senior secured notes due 2011 and its second-priority senior secured notes due 2013, according to a 6-K filing with the Securities and Exchange Commission.

The waivers were necessary due to payments under the company's definitive construction agreement with Space Systems/Loral, Inc. that may be deemed to exceed the level of capital expenditures that Satmex may make or commit to under the note indentures.

In the 6-K, the company said that it will be required to make expenditures of about $65 million over the next five months under the agreement. The waivers allow the company to make up to $100 million of cash payments in connection with the agreement.

In return, Satmex has agreed to an increase in the interest rate for the first-priority notes to Libor plus 925 basis points from Libor plus 875 bps.

On March 17, the company said it was continuing to explore its strategic alternatives and restructuring options after the termination of a stock purchase agreement with EchoStar Satellite Acquisition LLC and a Mexican joint venture partner.

As previously reported, EchoStar terminated the stock purchase agreement because Satmex did not obtain necessary consents and waivers from noteholders.

Satmex is a Juarez, Mexico-based satellite coverage provider.

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