Debt Level, Interest Rate To Be Reduced

Loral Space & Communications (NYSE: LOR)
announced today that the exchange offers and consent solicitations initiated
on November 23 by its wholly owned subsidiary, Loral CyberStar, Inc.,
expired at midnight last night, as planned. Holders of more than 90 percent
in the aggregate of the senior notes due 2007 and the senior discount notes
due 2007 accepted the offers, satisfying Loral’s requirement that holders of
a minimum of 85 percent of the outstanding notes accept the offers. Loral
CyberStar will now proceed to complete the exchange. Further details will
be available at the closing, expected to occur before the end of 2001.

The interest rate on the new notes will be 10%, a reduction from the 11.25%
interest rate on the existing senior notes and the 12.5% rate on the
existing senior discount notes. As a result of the lower interest rate and
the approximately $225 million reduction in debt, Loral’s annual cash
interest payments will be reduced by at least $38 million.

Loral CyberStar’s existing notes not tendered in the exchange will remain
outstanding, retaining their original maturities and interest rates, but
will lose the benefits of substantially all of their covenant protections.
The new notes will be guaranteed by Loral and mature on July 15 2006, while
the existing notes are non-recourse to Loral. As part of this exchange Loral
will issue to the new note holders approximately $6 million five year
warrants to purchase Loral Space & Communications common stock
(approximately 1.8% of the company’s outstanding stock) at a price of $2.37
per share.

The lead manager and lead solicitation agent for the transaction is Dresdner
Kleinwort Wasserstein. In addition, Banc of America Securities LLC,
JPMorgan and Lehman Brothers Inc. are serving as co-managers and
solicitation agents.

Loral Space & Communications is a high technology company that concentrates
primarily on satellite manufacturing and satellite-based services. For more
information, visit Loral’s web site at www.loral.com.

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This document contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. In addition, from time to
time, Loral Space & Communications Ltd. or its representatives have made or
may make forward-looking statements, orally or in writing. Such
forward-looking statements may be included in, but are not limited to,
various filings made by the company with the Securities and Exchange
Commission, press releases or oral statements made with the approval of an
authorized executive officer of the company. Actual results could differ
materially from those projected or suggested in any forward-looking
statements as a result of a wide variety of factors and conditions. These
factors and conditions have been described in the section of Loral’s annual
report on Form 10-K for the fiscal year ended December 31, 2000, entitled
"Certain Factors That May Affect Future Results," and the company’s other
filings with the Securities and Exchange Commission. With regard to
forward-looking statements concerning Loral CyberStar, Inc. and its
business, financial condition, results of operations and prospects, the
factors and conditions which could materially affect these statements are
described in the section of Loral CyberStar’s annual report on Form 10-K for
the fiscal year ended December 31, 2000, entitled "Certain Factors That May
Affect Future Results." The reader is specifically referred to these
documents regarding the factors and conditions that may affect future
results.

Contact: Jeanette Clonan

Tony Doumlele

(212) 697-1105