Loral CyberStar achieves 90.8% participation in debt exchange

New York, Dec. 31 - Loral Space & Communications said its Loral CyberStar, Inc. unit achieved a 90.8% participation rate in its debt exchange offer.

The New York satellite company said Loral CyberStar issued $613 million of new notes guaranteed by the parent Loral Space in exchange for $841 million of 11.25% senior notes due 2007 and 12.5% senior discount notes due 2007. Holders of the new notes also received 6.04 million warrants to purchase Loral Space stock. The warrants are exerciseable at $2.37 a share and expire after five years.

The new notes carry an interest rate of 10%. This lower rate combined with the $229 million reduction in debt will reduce Loral's annual cash interest payments by $39 million, the compnay said.

After the exchange, $37 million principal amount of the 11.25% notes and $49 million principal of the 12.5% notes remain outstanding.

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