TerreStar to start roadshow Tuesday for $450 million eight-year notes

By Paul A. Harris

St. Louis, Jan. 29 - TerreStar Networks Inc., a majority-owned subsidiary of Motient Corp., will begin a roadshow on Tuesday for its $450 million offering of eight-year senior secured discount notes, according to market sources.

Pricing is expected on Feb. 7.

The notes will have a zero percent coupon for the first four years, after which they will become cash-pay.

JP Morgan, Lehman Brothers and UBS Investment Bank are joint bookrunners for the notes, which will be marketed via Rule 144A with registration rights and via Regulation S.

The notes will come with four years of call protection.

About $72 million of the proceeds will be used to repay debt owed to Motient and the remainder will be used for working capital and general corporate purposes, including the buildout of TerreStar's integrated satellite and terrestrial network.

TerreStar is a developer, builder and operator of an IP-based integrated satellite and terrestrial communications network and has corporate offices in Reston, Va., and Lincolnshire, Ill.

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