XTAR to Provide X-band Services to Spanish Ministry of Defense; XTAR Finalizes First Contract for Commercial Service On Its XTAR-EUR Satellite.

Business/High Tech Editors

WASHINGTON--(BUSINESS WIRE)--May 30, 2002

XTAR, a joint venture between Loral Space & Communications (NYSE:LOR) and HISDESAT, S.A., today announced that it has finalized an agreement to lease X-band capacity on its XTAR-EUR satellite to the Spanish Ministry of Defense (SMOD).

Commencing with the XTAR-EUR satellite's in-service date scheduled for late 2003, the SMOD will use 244 MHz of X-band capacity on XTAR-EUR until HISDESAT's SpainSat satellite enters service in 2004. At that time, the SMOD will have access to the XTAR transponders to backup its capacity on SpainSat. Both spacecraft are currently under construction at Space Systems/Loral (SS/L), Palo Alto, Calif.

"This service contract is a significant milestone for our newly formed company," said Bill Wright, president of XTAR. "As government demand for satellite bandwidth continues to grow, XTAR is uniquely positioned to augment existing government communication capabilities swiftly and efficiently."

The XTAR-EUR satellite, based on SS/L's space-proven 1300 platform, is designed to carry twelve wideband and high-power X-band transponders. The satellite will feature multiple steerable spot beams that allow it to follow its users as they travel anywhere within the footprint of the satellite. XTAR-EUR is designed to operate with existing and planned defense communications terminals around the world.

HISDESAT's SpainSat satellite will carry thirteen X-band and one Ka-band transponders when it enters service in the second quarter of 2004. HISDESAT will lease five of SpainSat's X-band transponders and the Ka-band transponder to the SMOD, with the remaining eight X-band transponders and related steerable spot beams to be leased by XTAR for defense customers in the U.S. and in other allied governments. Together, the two satellites will cover nearly two-thirds of the earth's surface, from North America to Southeast Asia.

"With XTAR-EUR and SpainSat, HISDESAT and Loral will be able to provide a unique, commercial X-band solution to the Spanish Government, providing timely access to capacity and cost-effective on-orbit redundancy," stated Jose Maria Hoyos, CEO of Spanish company HISDESAT. "Together, we look forward to serving the long term needs of Spain and its allies in worldwide defense communications."

XTAR, LLC is a new defense satellite communications company serving the communication needs of U.S., Spanish and allied governments' operations. The company is a joint venture between managing partner Loral and HISDESAT. XTAR is headquartered in Washington, D.C., and has offices in Madrid, Spain and Palo Alto, Calif.

The recently formed HISDESAT, S.A., headquartered in Madrid, is owned jointly by Hispasat, S.A., the Spanish commercial satellite services company, and the leaders of Spain's space industries -- EADS-CASA Espacio, INDRA, INSA and SENER. Hispasat has been providing X-band services to the Spanish Ministry of Defense since 1992 and with this new project, HISDESAT will provide enhanced capabilities, including Ka-band, for Spain's defense applications.

Loral Space & Communications is a high technology company that concentrates primarily on satellite-based services and satellite manufacturing, including broadcast transponder leasing and value added services, domestic and international corporate data networks, broadband data transmission and Internet services. For more information, visit 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 the company's annual report on Form 10-K for the fiscal year ended December 31, 2001, 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.