BANKING IN SPAAAACE: Accessing Credit / Debt Investment Capital for Space Assets
The StellarModal Industry Council will lead a virtual presentation and discussion entitled "Banking in Spaaaace" focused on how traditional banking (access to credit/debt capital) practices are evolving within the New Space Economy on Tuesday, April 19th.
Historically, the space industry has relied on equity funding. Credit is limited to corporate-backed and export agency loans. But as the space industry evolves, traditional financing sources, such as asset-based lending, credit revolvers, etc., are increasingly viable options to fund space operations and scale space businesses.
In 2021 New Space companies collectively secured only 1 deal for ~$12 million from the European Investment Bank. This is woefully small (less than 1/100th of a percent) compared to the $370 billion dollar valuation of the space sector in 2021.
For comparison the Oil and Gas sector’s combined market capitalization is ~$2 trillion, or about 5x the space sector’s valuation today, and it has a debt-to-equity ratio in the last five years of 50% for energy and 61% for manufacturing. This means that the oil and gas sector is leveraging $2+ trillion compared to the $12 million in space.
Depending on the source the space sector is projected to grow to $1.1-2.7 trillion or more by 2040, which may well be larger than oil and gas is today. In order for this transition to happen we need to very rapidly scale the financial and legal infrastructure so the space sector can stabilize with much more stable capital sources.
Presenters at the Banking in Spaaaace discussion will include:
Nathan Whigham - EN Capital
Kevin Barry - Lightbridge Consulting
Eduardo Pineda Alfaro - Lightbridge Consulting
Charles Stotler - University of Mississippi, School of Law, Air & Space Law Program
The 90-minute virtual discussion will be presented on Zoom beginning at 11 am central time (-6 UTC).
(Source: Stellar Modal Transportation Association)