Finance Solutions

The Future of Space Financing

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Space Structured Finance Solutions

A DIPP solution results in an SFC SPV purchasing finished or nearly finished (kits) manufactured and assembled components for spacecraft at a discounted price.
The degree of completion of the inventory depends on the whether the inventory can be sold in an “as is” completed form or whether final design and assembly is required to meet the needs of a particular customer.
The transaction provides sales and revenue to the client and removes asset inventory from its balance sheet.
The client agrees not to sell its own similar assets to its customers before all the DIPP assets are sold.
The discounted DIPP purchase price assures that SFC can avoid a loss.
The revenue sharing of the final sales price to the end-user incentivizes the client to have the assets sell at the highest possible market price, providing profitable returns to SFC and the client.

With Pre-Delivery Payment (PDP) Financings, SFC provides scheduled contract payments to manufacturers.
Typically, the SFC client makes interest-only payments until the asset is delivered by the manufacturer.
At the time of delivery, the PDP program is converted into a Space Asset Secured Transaction (SAST) or a Space Asset Lease (SAL).

Similar to historical aviation, vessel and railcar financing structures, SAST transactions provide debt capital for space assets with a repayment schedule.
The repayment of the SAST debt is secured by various protections cumulatively called a “security package”.
A SAST transaction does not transfer title or remove the space assets from the client’s balance sheet.

An alternative to Secured Space Asset Financing is Space Asset Leasing (SAL).
Various types of SALs are applicable depending on the asset, the market and the client’s needs.
Typical SAL examples include:
Operational Space Asset Leases, in which SFC owns the asset and retains ownership after the term of the lease.
Finance Space Asset Leases, in which SFC owns the asset and transfers title after the completion of the lease term.
Sale & Leaseback Space Asset Leases, in which SFC purchases an existing space asset from the client and leases (operational or finance) the space asset back to the client (freeing up cash previously invested into the space asset)

OBS Service is the most sophisticated form of Space Asset financing.
As the name implies, it is really a service instead of an asset financing.
The key benefits to OBS Service transactions are:
Removal of the space asset from the client’s balance sheet.
Improved debt-to-equity ratios for the client.
Optimization of per-use costs.
Ability to reduce overall costs by sharing the space asset usage with other parties.
All regulatory obligations relating to the space asset are on SFC.
All space asset ownership risks are on SFC.

SFC’s SAC Partner Program is focused on supporting space asset manufacturers (SAMs) sales by financing their customers’ purchases.
SFC works SAMs from the beginning of the sales process by offer the full range of SFC Space Asset Financing solutions to their customers.
Having non-dilutive financing solutions for customers enables SAMs to be more competitive and shorten sales cycles.
The SAC Partner Program is a non-exclusive relationship and there is no cost to the SAM.
The SAC Partner Program can also be combined with the Discounted Inventory Purchase Program (DIPP) to have sellable inventory and avoid longer delivery periods.

Space Structured Finance Solutions