Glossary

InfraOrbit glossary.

43 terms used in space financings, export credit and M&A, in plain English.

A

Anchor tenant: A customer, often a government, that commits to a large share of a new system's capacity from the start, making it easier to finance.
Appropriations risk: The risk that a legislature does not fund a government contract in a future year, so payments stop even though the contract continues.
Assignment of Claims Act: US statutes that let a contractor assign payments under a government contract to a bank or other financing institution, if the contract allows and notice is given.

Buyer credit: A loan to the buyer of an export, usually from commercial banks with an export credit agency guaranteeing most of it.

C-band: A range of frequencies long used for satellite broadcasting. In the US part of it was cleared for 5G after a 2021 FCC auction, with payments to satellite operators.
Cape Town Convention: The 2001 treaty that created an international registry for interests in mobile equipment. Its aircraft protocol underpins modern aircraft finance; its space protocol is not yet in force.
Capped call: Options an issuer buys when it sells a convertible, which offset dilution between the conversion price and a higher cap price.
CIRR: The Commercial Interest Reference Rate: a fixed rate set for each currency and tenor at which export credit agencies may lend directly.
Concession: A long-term contract under which a government grants a private company the right and obligation to build and operate a system, often with public funding.
Constructive total loss: A loss treated as total because a satellite's capacity or life has fallen below a threshold in the policy, even though it still partly works.
Conversion premium: How far the conversion price is set above the share price when a convertible is priced.
Convertible note: A bond the holder can convert into shares at a set price. The conversion option lets the issuer pay a lower coupon.

Export contract: The supply contract that an export credit supports, such as a satellite procurement or launch services agreement. ECA support is sized as a share of its value.
Export credit agency (ECA): A government agency or state-backed company that lends to, guarantees or insures buyers of its country's exports, including satellites, launches and insurance.

FCC licence: A US Federal Communications Commission authorisation to use spectrum or operate a satellite system. Lenders cannot take security over the licence itself, only over the holder's shares and the proceeds of a sale.
Fundamental change: An event defined in a convertible indenture, such as a takeover or delisting, that lets holders require the issuer to buy back the notes, usually at par.

GEO (geostationary orbit): An orbit about 35,786km above the equator where a satellite stays over one point on Earth. Traditional broadcast and broadband satellites use it.

In-orbit acceptance: The point after launch and testing when the buyer accepts that a satellite works as specified. It often triggers final payments and the start of repayment.
In-orbit insurance: Insurance, usually annual, against loss of a satellite's capacity or life during operation, after launch cover ends.
ITU filing: A filing by a national administration with the International Telecommunication Union to coordinate and record a satellite network's frequencies and orbit. Priority in the ITU system is valuable.

Landing rights: Permission from a country's regulator for a satellite system to provide service to users there.
Launch insurance: Insurance against loss of or damage to a satellite from launch and, usually, a first period in orbit.
LEO (low Earth orbit): Orbits up to about 2,000km. Broadband constellations such as OneWeb and Starlink use LEO for low latency, which needs hundreds or thousands of satellites.
Licence subsidiary: A special-purpose company that holds a licence and nothing else, so its shares can be pledged and sold with the licence.
Local costs: Costs incurred in the buyer's own country. Export credit agencies can support a limited amount of them alongside the export contract.
Loss payee: The party named in an insurance policy to receive claim payments. In a financing it is the lenders' security agent.

Mandatory prepayment: A requirement to repay a loan early from certain cash, such as insurance proceeds after a total loss or the proceeds of an asset sale.
MEO (medium Earth orbit): Orbits between LEO and GEO, used by navigation systems and by SES's O3b mPOWER broadband constellation.

Net share settlement: Settling a conversion by paying the principal in cash and only the excess value in shares.
Non-vitiation: An insurance clause that keeps the policy paying lenders even if the insured operator breached its terms or failed to disclose something.

PIK (payment in kind): Interest that is added to the loan balance rather than paid in cash, common during construction.

Rule 144A: A US securities rule that lets issuers sell bonds to large institutional investors without full SEC registration. Most convertibles and high-yield bonds are sold this way.

Sculpted amortisation: A repayment schedule shaped to forecast cash flow rather than in equal instalments.
Self-insurance: Carrying a risk without buying insurance. Large LEO constellations often self-insure in-orbit losses, relying on spare satellites and replacement launches.
Share pledge: Security over the shares of a company. In satellite deals it is the main route to control of the satellites, licences and contracts on enforcement.
SPAC: A special purpose acquisition company: a listed shell that raises cash and then merges with a private company to take it public. Many space companies listed this way in 2020 and 2021.
Space Assets Protocol: The 2012 protocol to the Cape Town Convention that would create an international registry for security interests in satellites. It needs ten ratifications and is not yet in force.
Spectrum: Ranges of radio frequencies used to communicate with satellites and users. Rights to use them are granted by national regulators and coordinated through the ITU.
State of registry: The country that registers a space object with the UN and keeps jurisdiction and control over it under the Outer Space Treaty.
Step-in rights: Lenders' rights, under direct agreements with key contractors, to take over a contract or appoint a replacement to perform it after a default.

Termination for convenience: A government customer's right to end a contract at any time for its own reasons, paying for work done but not for profit on work cancelled.
Transfer of control: A change in who controls a licensed operator, which normally needs the regulator's prior consent, such as the FCC in the US.
TT&C: Telemetry, tracking and command: the ground stations and systems used to monitor and control a satellite. Lenders need access to them to keep a satellite operating after enforcement.