Communications Satellite Corp. announced yesterday that it will enter the commercial paper market to seek $100 million in working capital for various needs.
This is the first time Comsat has used this form of financing in its 20-year history and comes two weeks after the Federal Communications Commission gave formal approval to the company's $440 million capitalization plan.
Comsat's commercial paper has received a P1 rating from Moody's Investors Service and an A1+ from Standard and Poor's--the highest ratings those services list.
According to a Comsat spokesman, "The commercial paper program has been planned for quite some time." Comsat's vice president for finance, Bruce L. Crockett, said in a statement, "We feel that the commercial paper market represents the most-cost-effective way to meet our working capital and interim construction requirements."
Industry analysts agree that satellite communications is a very-capital-intensive business. Comsat has special capital concerns, because it is trying to provide direct-broadcast-satellite service to home television customers through its wholly owned Satellite Television Corp. subsidiary. However, the company is negotiating to find an equity partner in the venture, with CBS Inc. and General Cinema being prominently mentioned as possible candidates.
STC hopes to launch its service by the fall of 1984.