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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT -- Ignore unavailable to you. Want to Upgrade?

To: pcstel who wrote (21737)	2/1/2001 4:41:23 PM
From: Pierre	Respond to of 29987

Would you like my read on the "Bondholder" options at this point?? Sure, why not. It'll be awhile before I can read them as my broker hasn't mailed them to me yet. You ask - you bought bonds without reading the prospectus?! But of course. I'm a lawyer. I never read the fine print until someone's been screwed. Are you trying to tell me that someone's been screwed? Could that someone be me? Sincerely (and fully resigned to assuming the position) Pierre

To: pcstel who wrote (21737)	2/1/2001 5:31:34 PM
From: pcstel	Read Replies (5) \| Respond to of 29987

Pierre: Let me help you out here!! OK.. From the "Bond Prospectus" The Exchange Notes will be, and the Original Notes are, senior obligations of the Issuers. The Exchange Notes will rank pari passu with all other existing and future senior Debt (as defined) of the Issuers and senior to all subordinated Debt of the Issuers. So Senior Debt and all Future Senior Debt rank "pari passu" with the Bond Holders Notes!! From the Globalstar SEC Filings: "If Globalstar cannot satisfy this covenant, obtain waivers or amendments from a majority of the bank lenders, or fulfill the $500 million obligation in a form satisfactory to all bank lenders, Globalstar will be in default under its debt facilities (including vendor financing) and Globalstar's lenders and bondholders would have the right to accelerate payment of their loans to Globalstar." So as you can see. Globalstars "lenders", not just Bondholders are able to "accelerate payment". The Senior Debt Holders are capable also!!! So now we have established that Senior Debt, and Senior Notes are ranked... "Equally"!!! In other words.. They have the same voting rights!! Now let's look at the "debt that is outstanding"!! Bondholders have 1.45 Billion in "Senior Notes" Loral has a 500 million dollar note that is in Their Name after they purchased it from B of A.. Hint, Hint Loral also has approx 68 million in notes from the Chase guarantee, and the LMT recourse agreement! So that 568's million.. In addition SS/L holds 330 million (minus 40 million paid) = 286 million (plus interest) which totaled 304 million on March 31, 2000 So the combination of SS/L and Loral's Senior Debt equalls 872 million dollars. "SS/L has provided $330 million of billings deferred under its construction contracts with Globalstar, comprised of: $105 million of orbital incentives, of which $44 million was repaid by Globalstar in 1999 and $61 million is expected to be repaid in 2000; $90 million of vendor financing which bears interest at LIBOR plus 3% and is repayable over five years commencing in 2001; and $134 million of non-interest bearing vendor financing, due over five years in equal monthly installments, commencing in 2000. SS/L's subcontractors have assumed $116 million of such financing." Now our boys over at Qualcomm granted GLP a Vendor Finance agreement of 400 million (new) and renegociated the original 100 million VF and accured interest of 30 million. So Qualcomm VF total after the agreement was 531 milllion.. HOWEVER, the agreement stated that Vendor Financing would cover "future contract payments" due Qualcomm.. And that Loral would "recourse" 50% of the amounts VF'd in excess of the 531 millon dollar agreement.. In other words.. Qualcomm gave G* a "Blank Check" for future VF amounts.. The only cavet was that Loral would be "recourse" 50% or the excess amounts.. However, in the agreement.. It stated that Loral's "total exposure" to Globalstar would not exceed 500 million dollars.. Which was covered by the "500 million dollar credit facility which Loral Guaranteed.. "Loral has agreed that if the principal amount (excluding capitalized interest, currently amounting to $31.1 million) outstanding under the Qualcomm vendor financing facility exceeds the principal amount outstanding under Globalstar's $500 million credit facility, as determined on certain measurement dates, then Loral will guarantee 50% of such excess amount. As a result, Loral's aggregate guarantee liability for debt outstanding under the Qualcomm vendor financing facility and Globalstar's $500 million credit facility will not exceed $500 million." SO HERE IS THE BEAUTY OF THIS SET UP!!! EVERY TYPED INVOICE FROM QUALCOMM TO GLOBALSTAR GOES DIRECTLY TO "SENIOR DEBT".. It is not posted as A/R. Which would make it "vendor debt".. But, it goes directly to SENIOR DEBT.. The second it leaves the TYPEWRITER... ( I know Qualcomm doesn't use Typewriters).. So if you take the 872 Million in Senior Notes that Loral and SS/L hold.. and add it to the base 531 million as of May ,2000 That gives you a total of!!! Chi Ching!!! 1.403 Billion combined between Loral and Qualcomm at May, 2000.. Now interest automatically gets "Thrown into Senor Debt" as it occurs.. And Qualcomm has Delivered 50,000 or so phones since that time.. And all contract payments due Qualcomm since then have gone directly too, bypass Accounts Receivable, Senior Debt!! So what I am saying.. It that.. Qualcomm and Lorals Notes.. EXCEED THE DOLLAR VALUE of the Bondholders Noters!!! So now.. If we go back and look at the "Bond Prospectus".. You will find this statement...... "If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the outstanding Notes may declare the principal of and accrued but unpaid interest and Liquidated Damages (if any) on all the Notes to be due and payable. Upon such a declaration, such principal, interest and Liquidated Damages shall be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of either Issuer occurs and is continuing, the principal of and interest and Liquidated Damages (if any) on all the Notes will ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders of the Notes. ***Under certain circumstances, the Holders of a majority in principal amount of the outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences."***** sec.gov THATS RIGHT!!! "Under certain circumstances, the Holders of a majority in principal amount of the outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences." CHECKMATE!! In my opinion.. It will take 50% or the existing Bondholders to push GLP into Bankruptcy.. Since the Bondholders hold less than 50% of the outstanding NOTES!! (Because the need 25% of the TOTAL NOTE HOLDERS) AND EVEN IF THEY PROCEED WITH THIS COURSE OF ACTION.. QUALCOMM AND LORAL HAVE ENOUGH VOTING RIGHTS TO IMMEDIATELY RESCIND THAT ACCELERATION DEMAND!!! THAT IS WHY THEY DID NOT PAY THE JANUARY 15TH VENDOR FINANCING PAYMENTS!! Because, It may have given ratio "control" to the Bondholders!!! SO THAT'S IT! NO BANKRUPTCY.. IMO!! 50% of the Bondholders can force it.. But, L/Q will just use their Voting Power as majority Note Holders to rescind the payment acceleration!!! THE BONDHOLDERS ARE POWERLESS.. AND MUST ACCEPT WHATEVER L/Q DECIDE ON... IMO!!! AGAIN.... ALL IN MY OPINON!!! NOW!! How much is GSTRF worth "IF" it is not destined to for Bankruptcy... I think more than 9/16 IMO!!! LOL!!! Could I bring you some Aspirin??? Uhh!! Please excuse any typos.. I was going pretty fast!! PCSTEL