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.
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.
(Score: 3, Interesting) by Immerman on Friday November 09 2018, @02:50PM
>World wide Internet sat net (Not really disruptive because there is nothing at that scale to disrupt)
Umm, seems to me it would be pretty disruptive to pretty much all terrestrial internet providers. There might not be a single business to rival the scale, but the industry at a whole certainly does.
After all, if you build a LEO network to serve rural Africa and Asia, it can also serve most of the developed world at little additional cost, you just need more terrestrial uplinks on this side of the planet. And if they can maintain even razor-thin margins in the developing world, they should be able to easily undercut pretty much all first-world ISPs while maintaining huge profit margins. Big if perhaps - they may be counting on us to subsidize the rural market - after all, it works both ways - if you've got the network for the developed world, it costs little to also serve the developing world, and any sales there, no matter how cheap, are almost pure profit.