Loral Space & Communications has announced that Space Systems/Loral, the company's satellite manufacturing and technology unit, will build two new satellites to provide leased transponder and network communications services to the Spanish Ministry of Defense and government users in the United States, Spain and other friendly nations.

Two new companies have been formed to provide leased satellite services: HISDESAT, S.A., which includes various Spanish partner companies, notably HISPASAT, S.A., the existing Spanish commercial satellite communications company based in Madrid; and XTAR, a satellite communications services company in which Loral will hold a 51% interest as managing partner with the newly formed HISDESAT.

"Loral views X-band satellite communications services to governments as a new commercial application with substantial growth potential," said Bernard L. Schwartz, chairman and CEO of Loral. "XTAR plans to extend its service concept to other locations around the world to meet a growing demand worldwide for a variety of satellite services. Loral's XTAR venture with HISDESAT complements its existing Loral Global Alliance portfolio of C- and Ku-band satellite services."

"This project gives HISPASAT and the Spanish space industry the opportunity to enter into a new worldwide business involving new technologies in the X and Ka-bands," said Jacinto Garcia Palacios, CEO of HISPASAT.

HISDESAT and XTAR have both executed ATPs (authorizations to proceed) to SS/L for the manufacture of two satellites.

For HISDESAT, SS/L will build SpainSat, which will primarily provide dedicated communications for the Spanish Ministry of Defense. SpainSat will carry nine specially configured X-band transponders and a Ka-band payload and will operate from the 30(Degree) West longitude orbital position, providing coverage of Spain, Europe, Africa and the Americas.

SS/L will also build the XTAR-EUR satellite for XTAR, which will offer leased transponder services to government customers and provide back-up service for the Spanish Ministry of Defense. The XTAR-EUR satellite will carry twelve wideband X-band transponders and be located in either an Atlantic or Indian Ocean region orbital slot to be determined by XTAR. The satellite, in conjunction with the SpainSat satellite, will extend the coverage area to include Eastern Europe and the Middle East. Loral Skynet will provide telemetry, tracking and control (TT&C) services for XTAR from its existing ground stations.

XTAR is scheduled to enter service in 2003 and Spainsat in 2004.

Both satellites will be available to provide leased services to government users in the United States and Spain, as well as other friendly and allied nations within the satellites' extensive coverage area. Both spacecraft are designed to meet the growing demands of government users and will be able to operate with existing and planned communications infrastructure.

For XTAR, Loral and HISDESAT will provide initial financing of $55 million over the next two years. The remainder of required financing will be arranged by XTAR.

HISPASAT is the leading commercial satellite communications provider in Spain and Portugal and is currently undertaking a large expansion in Central and South America. The company has been providing X-band services to the Spanish Ministry of Defense since 1992 and with this new project HISDESAT (with their partners, the leaders of the Spanish Space Industries - EADS-CASA, INDRA, ESPACIO, INSA, INTA, SENER) and XTAR, the service will be enhanced and extended to new Ka-band governmental applications.

Space Systems/Loral is one of the world's premier designers, manufacturers, and integrators of powerful geostationary (GEO) satellites and satellite systems. SS/L also provides a range of related services, including mission control operations and procurement of launch services. Based in Palo Alto, California, SS/L has an international base of commercial and governmental customers whose applications include broadcast video distribution, broadband digital communications, direct-to-home broadcast, environmental monitoring, and air traffic control. SS/L is ISO 9001 certified.

Loral Space & Communications is a high technology company that concentrates primarily on satellite manufacturing and satellite-based services, including broadcast transponder leasing and value added services, domestic and international corporate data networks, broadband data transmission and content services and Internet services.

Editor's Note: X-band refers to a range of radio frequencies from approximately 7 to 8 GHz, falling between C-band and Ku-band. X-band offers higher power and better data rates than C-band and requires smaller dishes. X-band is also less susceptible to occasional rain fade than Ku-band. The U.S. and NATO use X-band frequencies for military and other government uses.