Milbank Advises O3b Networks on Progressive Financing for its Innovative Satellite System

Milbank, Tweed, Hadley & McCloy LLP has advised O3b Networks on the implementation of a revised financial structure (including a new US$184 million COFACE covered facility, a US$31 million term facility and US$143 million of new equity financing) to facilitate the procurement of a further eight satellites and the launch of four of those satellites.

The story so far – In 2010, Milbank advised O3b Networks in its original US$1.2 billion financing of the purchase from Thales Alenia Space and launch of its first eight medium earth orbit satellites to support super-fast broadband connections to Africa and other emerging markets. In 2011, Milbank advised the company on the financing of four additional satellites which served to significantly boost both the throughput and redundancy of the O3b constellation. The additional financing which has followed this year is designed to enable the company to radically expand its business and connectivity of customers across the globe to service the project debt in a sustainable manner.

This highly innovative US$1.7 billion greenfield satellite financing for O3b has been key for this satellite system. The financing of this project is unique in a number of respects. It is a multi-sourced financing structure which brings together one export credit agency, four commercial lenders, seven development finance institutions and nine equity investors.

O3b stands for the “other three billion”, a reference to the nearly half of the world’s population that is not adequately served with broadband internet access due to the absence of a backbone of super-fast fibre-optic-cable connections in many regions. Described by the BBC as “one of the most ambitious commercial space projects of the decade”, the system is designed specifically to provide “fibre in the sky” broadband internet access to this underserved populace.

The cross-practice Milbank team was led by London Project Finance partner John Dewar with Securities partner James Ball (New York), Space & Satellite partner Peter Nesgos (New York) and Alternative Investments partner John Williams (New York). Other Milbank team members included senior associate Oliver Irwin and associates Vicky Cox, Benjamin Pridgeon and Isabel Vickers (all from the London office) as well as New York associates Blake Gilson, Theo Hart, Bodie Stewart, Benedikt Mertens and Tamika Bent.

John Dewar said “we are delighted to have advised O3b throughout the life of this project. Matching the truly global nature of this system with an integrated Trans-Atlantic team of legal professionals has provided the company with the support they need to drive this ambitious and unique project successfully onwards”.

About Milbank

Milbank, Tweed, Hadley & McCloy LLP is a leading international law firm that has been providing innovative legal solutions to clients throughout the world for nearly 150 years. Milbank is headquartered in New York and has offices in Beijing, Frankfurt, Hong Kong, London, Los Angeles, Munich, São Paulo, Seoul, Singapore, Tokyo and Washington, DC.

The firm’s lawyers provide a full range of legal services to the world’s leading commercial, financial and industrial enterprises, as well as to institutions, individuals and governments. Milbank’s lawyers meet the needs of its clients by offering a highly integrated and collaborative range of services across key practice groups throughout its global network. Milbank’s integrated practice is underpinned by its attorneys’ acknowledged technical excellence, sectorial experience and a strong tradition of innovation and client service.