Loral and Its Lenders Agree to Multi-Year Extensions for $1.1 Billion in Bank Credit Facilities

NEW YORK – December 24, 2001 – Loral Space & Communications (NYSE: LOR)
announced today that it has taken early action to extend to 2005 the
maturities of both of its major bank credit facilities, the $600 million
Loral SpaceCom facility and the $494 million Loral Satellite facility. In
addition, the company obtained significant improvements in the amortization
schedules. All lenders agreed to these revised terms.

Bernard L. Schwartz, chairman and chief executive officer of Loral, said,
"The support demonstrated by the bank groups, which include several of the
world’s largest banks, is very gratifying. The early action taken to amend
these credit facilities represents the third step we have taken in 2001 to
bolster Loral’s financial strength. Just last week we completed the Loral
CyberStar debt exchange offer, reducing debt by approximately $225 million
and Loral’s annual cash interest payment by $38 million. And, in April,
Loral concluded a preferred stock exchange offer resulting in savings of
approximately $17 million annually in preferred dividend payments through
2007 and $279 million in mandatory redemptions in 2006 and 2007.

"The extended maturities and revised amortization schedules established
under the amended facilities support the currently underway expansion of our
high-margin, fixed satellite services business. The company will increase
the size of its Loral Skynet fleet with the launch in late-2002 and
early-2003 of several new satellites."

Additional information on the amended facilities:

• The final maturity for the $600 million Loral SpaceCom credit facility was
  extended from November 2002 to January 2005.

• The final maturity for the $494 million Loral Satellite credit facility
  was extended from August 2003 to January 2005.

• Amortization payments are as follows: $85 million for 2002; $65 million
  for 2003; and $94 million for 2004.

• This reduces scheduled principal payments for the two facilities by $25
  million and $535 million in 2001 and 2002, respectively, somewhat offset by
  higher agreed-to interest payments.

• Loral increased the collateral supporting the credit facilities.

• There were no changes to the principal amounts of the facilities.

  
  

For the Loral SpaceCom credit facility, Banc of America Securities and
Deutsche Banc Alex Brown served as co-lead arrangers and, along with Credit
Lyonnais, served as joint book running managers.

For the Loral Satellite credit facility Banc of America Securities LLC and
Credit Lyonnais served as co-lead arrangers and joint book running managers.

Loral Space & Communications is a high technology company that concentrates
primarily on satellite manufacturing and satellite-based services. For more
information, visit Loral’s web site at www.loral.com.

# # #

This document contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. In addition, from time to
time, Loral Space & Communications Ltd. or its representatives have made or
may make forward-looking statements, orally or in writing. Such
forward-looking statements may be included in, but are not limited to,
various filings made by the company with the Securities and Exchange
Commission, press releases or oral statements made with the approval of an
authorized executive officer of the company. Actual results could differ
materially from those projected or suggested in any forward-looking
statements as a result of a wide variety of factors and conditions. These
factors and conditions have been described in the section of Loral’s annual
report on Form 10-K for the fiscal year ended December 31, 2000, entitled
"Certain Factors That May Affect Future Results," and the company’s other
filings with the Securities and Exchange Commission. The reader is
specifically referred to these documents regarding the factors and
conditions that may affect future results.

Contact: Jeanette Clonan

Tony Doumlele

(212) 697-1105