Russia’s Eximbank To Back ILS Launch Contract Bids

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WASHINGTON — The president of commercial launch provider International Launch Services (ILS) on March 14 said the company is now able to offer prospective customers financing backed by Russia’s export-import bank, whose absence in the past has cost ILS business.

Frank McKenna said ILS has recently received word from the Export-Import Bank of the Russian Federation, Eximbank, that it will provide loan-guarantee support for ILS customers seeking such backing.

McLean, Va.-based ILS is owned by Khrunichev of Moscow, which is prime contractor for the heavy-lift Proton rockets that ILS sells to commercial customers.

Export-credit agency financing has become an increasingly prevalent feature of capital spending programs not only of startup satellite ventures, but also of some of the more established and wealthy operators.

In 2010, Hughes Communications of Germantown, Md., selected Europe’s Arianespace launch consortium over ILS for the launch of its 6,100-kilogram Jupiter broadband satellite. Key to the contract was the loan-guarantee support of France’s Coface export-credit agency, which covered up to 85 percent of a $115 million loan Hughes took out to finance the launch.

Briefing reporters in Washington during the Satellite 2011 conference, McKenna said ILS was stung by the loss of the Jupiter contract and that it was “solely due to the [Coface] backing.”

McKenna said that while he is concerned that export-credit agency backing can distort the market by keeping alive companies and projects that otherwise would fail, he is aware that access to low-interest loans made available by these agencies is a reality in today’s commercial satellite market.

McKenna said ILS has not yet had occasion to use Eximbank support in a commercial bid, and that he expects it will be used only rarely.

“We will use it only on a selective basis,” McKenna said. “But it is now available to us.”