Mr. Dan Goldberg reports

TELESAT AND GOVERNMENT OF CANADA AGREE TO TERMS ON C$2.14 BILLION LOAN IN SUPPORT OF TELESAT LIGHTSPEED

On March 28, 2024, Telesat Corp. received a letter from Canada's Minister of Innovation, Science and Industry regarding an investment in Telesat Lightspeed. The letter states that, following several months of negotiations between Telesat and federal officials, the government of Canada (GoC) is prepared to invest $2.14-billion in Telesat Lightspeed by way of a loan to Telesat LEO Inc., a wholly owned subsidiary of Telesat, which is developing and will own and operate the highly advanced Telesat Lightspeed low-Earth-orbit (LEO) global broadband satellite constellation.

The loan will carry a floating interest rate that is 4.75 per cent above the Canadian Overnight Repo Rate Average (CORRA) with a 15-year maturity. Interest is payable in-kind during the Telesat Lightspeed construction period, followed by a 10-year sculpted amortization. Furthermore, Telesat LEO will provide the GoC with warrants for 10 per cent of the common shares of Telesat LEO based upon an equity valuation for Telesat LEO of $3-billion (U.S.).

"Telesat Lightspeed is a highly innovative and disruptive global broadband network and the largest space program in Canada's long and distinguished history as a space-faring nation," said Dan Goldberg, Telesat's president and chief executive officer. "I am delighted with the engagement we have had with the government of Canada on this flagship program, which will help bridge the global digital divide, create and sustain thousands of high-quality jobs in Canada, spur domestic innovation, investment and exports, and ensure that Canada is at the forefront of the rapidly growing new space economy. The government of Canada has been a strong supporter of the Telesat Lightspeed program, and we applaud their leadership and foresight.

"We estimate that, in addition to the roughly $2-billion (U.S.) of capital cost savings, we will realize roughly $750-million (U.S.) of savings in reduced borrowing costs relative to the original Telesat Lightspeed program. Telesat Lightspeed will revolutionize broadband connectivity for enterprise and government users, and represents a highly compelling growth and value-creation opportunity for Telesat and its stakeholders."

The GoC investment is subject to certain conditions, including the entry of definitive documentation with the GoC and Telesat's other financing sources to the GoC's satisfaction.

About Telesat Corp.

Backed by a legacy of engineering excellence, reliability and industry-leading customer service, Telesat is one of the largest and most-innovative global satellite operators. Telesat works collaboratively with its customers to deliver critical connectivity solutions that tackle the world's most-complex communications challenges, providing powerful advantages that improve their operations and drive profitable growth.

Continuously innovating to meet the connectivity demands of the future, Telesat Lightspeed, the company's low-Earth-orbit satellite network, will be the first and only LEO network optimized to meet the rigorous requirements of telecommunication, government, maritime and aeronautical customers. Telesat Lightspeed will redefine global satellite connectivity with ubiquitous, affordable, high-capacity links with fibre-like speeds.

We seek Safe Harbor.