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posted by martyb on Friday November 09 2018, @10:38AM   Printer-friendly
from the big-loan-and-mini-big-rocket dept.

After Goldman Balks, Musk Turns to BofA to Handle SpaceX Loan

Elon Musk frequently makes outrageous requests of his staff in his quest to remake global transportation and colonize Mars. But the terms he wanted on a loan for SpaceX were too much even for his closest ally on Wall Street. As recently as last week, Goldman Sachs Group Inc. had been canvassing investors for interest in $500 million of Space Exploration Technologies Corp. debt. By the time interested parties showed up Wednesday at the Four Seasons hotel in midtown Manhattan for a breakfast meeting, Bank of America Corp. was running the show for a $750 million deal.

The switch surprised bankers and investors, as Goldman is widely viewed as the Wall Street firm with the closest relationship to Musk. It helped take Tesla Inc. public in 2010, led a $1.8 billion bond sale last year and advised on his short-lived attempt to take the electric carmaker private for $420 a share. While Bank of America has a lending relationship with SpaceX, it has been shying away from some of the riskiest corners of the corporate-debt market.

Goldman balked when SpaceX, a first-time issuer, wanted wide latitude to raise additional debt in the future, according to people with knowledge of the matter, who asked not to be identified because the discussions were private. The hesitation highlights uneasiness among banks that have been challenged by regulators over the risks they're taking in the $1.3 trillion leveraged-loan market. Insatiable investor appetite for floating-rate debt has allowed heavily indebted companies to extract more concessions from lenders.

Also at Reuters and Axios.

SpaceX plans to build a "mini-BFR ship" to replace the usual second stage of the Falcon 9 rocket, ahead of late 2019 testing of the actual BFR/BFS. For now, this is intended only to test technologies for the BFR, such as the heat shield and "mach control surfaces". The new second stage will not be able to land propulsively, may not carry any payloads, and may only be used for a single test:

The goal for the modification is June 2019, Musk said in a follow up tweet. [...] [In September], SpaceX president Gwynne Shotwell said she expected the BFS to begin short, unmanned "hopping" tests in late 2019. This new timeline for a mini-BFR would fit perfectly with these tests.

In a follow up tweet, Musk said the tests would specifically look at how the mini-BFR's heat shield and mach control surfaces will hold up under the duress of launch and flight, elements that are difficult to test without actually escaping the Earth's orbit.

Also at Space News.


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  • (Score: 0) by Anonymous Coward on Friday November 09 2018, @11:22AM (2 children)

    by Anonymous Coward on Friday November 09 2018, @11:22AM (#759802)

    This submission seems to be all over the place.

    First, it's about some loan to SpaceX. Well, SpaceX is private so financials are private. How are we suppose to know anything there besides rumors?

    Not sure what this financing has to do with mini-BFR, but whatever. I just wonder if BFR is not going to become the Project v2.0 problem for SpaceX.

  • (Score: 2) by takyon on Friday November 09 2018, @11:29AM

    by takyon (881) <reversethis-{gro ... s} {ta} {noykat}> on Friday November 09 2018, @11:29AM (#759803) Journal

    BFR development could cost anywhere from $2 billion to $10 billion. So it's no wonder they are looking for some cash.

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  • (Score: 2) by takyon on Friday November 09 2018, @11:31AM

    by takyon (881) <reversethis-{gro ... s} {ta} {noykat}> on Friday November 09 2018, @11:31AM (#759804) Journal

    Also, SpaceX projects that its top source of revenue in a few years will be Starlink. In other words, SpaceX will get most of its money from being an Internet service provider. But they have to launch about 12,000 Starlink satellites within the next 6 years. They may be borrowing money to try to speed up the project [soylentnews.org].

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