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Iridium LLC

Reasons for failureGROUP 4PROJECT FINANCE.

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No, It as i! amount of "e#t. A de#t o$eran!.

As %er e&i#it ', te interest (o$era!e ratio of ).*+ su!!est tainterest amount to #e %aid as more tan te E-IT !enerated #te (om%an

-oo/ $alue of de#t to total (a%itali0ation as mu( i!er tante industr a$era!e

As te estimated (ost of te %ro1e(t is mu( i!er i( for(edte (om%an to !o for i!er amount of de#t

Te issued #onds at $er i! %remium ields (om%ared tomar/et2E&i#it 3 -aa rated (or%orate #ond ield 5 *.+67

89 .:eter Iridium raised a ri!tamount of de#t;

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:e #elie$e tat none of te teories amon! %ortfolio teor, o%tionteor, "e#t $s E

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9D

=old +6' millionof ten ear #ondsit arrants

*3) million #an/

fa(ilit *.*3

9*-onds '))m 96it arrants

-onds 94itout arrants

-onds 6))m99.+3

63)m term loan

4))m re$ol$in! LC

9'

63)m #ond9).''

+)))

4*3m term loan*.*3

+*3m (redit fa(*.*3

'))m9).3

8+7 "e#t C(le

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8+7 "e#t C(le

After te initial in$estment from s%onsors Iridium anted to mone from -ond mar/et #ut #e(ause of teir lo ratin! tee?e(ti$e ield as turnin! to #e around +3 so te de(ided

a!ainst te same

Te de(ided to rise mone +6'm $ia Insider de#t

=o te ent for -an/ loan Fa(ilit i( as relati$el (ea*.*3 #ut ad (o$enants of Re$enue tar!et atta(ed to it

After te su((essful laun( of IPO, te ent for '))m i!de#t 96 and 94

:en te #ond mar/et im%ro$ed furter te (ould !et 6))e$en #etter rates of 99.+3 and a furter #an/ (redit of *3

-e(ause of failure to !et e&%e(ted (ustomer #ase, te ad trene!otiate loans

-ut #e(ause tere (osts ad risen to D# from e&%e(ted (ost

9.D3# te (ould ne$er re(ou% from e&e(ution and strate!failure and ended u% #ein! #an/ru%t

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8uestion 6 :eter teir sea 9' 63) million of =eries " notes

"e( 9' 4*3 million term loan and +*3 million re$ol$in! LOC

"e( 9' *3) million in e&(an!e arrants and (as %aments

"e( 9' ')) million in se(ured (redit fa(ilit

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8uestion 6 :eter teir se