WASHINGTON, D.C. — December 18, 2003 — XTAR, a joint venture between Loral Space & Communications (OTCBB: LRLSQ) and HISDESAT, S.A., today announced that it has entered into an agreement with Arianespace to launch its XTAR-EUR satellite aboard an Ariane 5 ECA launch vehicle. The XTAR-EUR satellite is now undergoing final testing at Space System/Loral (SS/L) in Palo Alto, CA. The launch of XTAR-EUR is currently planned for early second quarter 2004.

With its launch arrangements and funding requirements secured, XTAR expects to begin offering its X-band services to government users in the United States, Spain, and other friendly and allied nations in July 2004, shortly after launch and the completion of in-orbit testing. Service will commence at the highly desirable 29 degrees East Longitude orbital slot providing a footprint extending from the Eastern Atlantic to Southeast Asia.

Weighing 3,600 kilograms at launch, XTAR-EUR is based on SS/L’s space-proven 1300 platform and carries twelve wideband and high-power X-band transponders. The satellite will feature on-board switching and multiple steerable theater beams that allow X-band capacity to follow its users as they travel anywhere within the footprint of the satellite. XTAR-EUR is designed to operate with existing and planned defense communications terminals around the world.

XTAR, LLC is a new satellite communications company committed to serving the needs of U.S., Spanish and allied governments. The company is a joint venture between Loral, which owns 56 percent, and HISDESAT, which owns 44 percent. XTAR is headquartered in Washington, D.C., and has offices in Madrid, Spain, and Palo Alto, Calif.

HISDESAT Servicios Estrat├ęgicos S.A. is a Spanish company headquartered in Madrid and incorporated in July 17th, 2001. HISDESAT’s aims are the acquisition, operation and commercialization of Government-oriented space systems, beginning with satellite government communications in the X-band and Ka -band frequencies. HISDESAT is owned jointly by Hispasat, S.A., the Spanish commercial satellite services company, INSA (100% owned by INTA) and the leaders of Spain’s space industries: EADS-CASA Espacio, INDRA an
d SENER. HISDESAT will provide enhanced capabilities, including Ka-band, for Spain’s defense applications.

Loral Space & Communications is a satellite communications company. It owns and operates a global fleet of telecommunications satellites used by television and cable networks to broadcast video entertainment programming, and by communication service providers, resellers, corporate and government customers for broadband data transmission, Internet services and other value-added communications services. Loral also is a world-class leader in the design and manufacture of satellites and satellite systems for c
ommercial and government applications including direct-to-home television, broadband communications, wireless telephony, weather monitoring and air traffic management.

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, Loral Space & Communications Ltd. or its representatives have made or may make forward-looking statements, orally or in writing, which 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 include those related to the filing, on July 15, 2003 by Loral and certain of its subsidiaries, of voluntary petitions for reorganization under Chapter 11 of Title 11 of the United States Code in the United States District Court for the Southern District of New York
and parallel insolvency proceedings in the Supreme Court of Bermuda in which certain partners of KPMG were appointed as joint provisional liquidators. Additional factors and conditions are also described in the section of the company’s annual report on Form 10-K for the fiscal year ended December 31, 2002, entitled “Certain Factors That May Affect Future Results,” and the company’s other filings with the Securities and Exchange Commission. The reader is specifically referred to these documents.