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Loral To Initiate Limited Service On Telstar 14/Estrela do Sul In March

Space Systems/Loral Raising Satellite to Geosynchronous Orbit

Palo Alto, Calif. — January 21, 2004 — Loral Space & Communications (OTCBB:LRLSQ), today said that it will begin limited service on its Telstar 14/Estrela do Sul 1 satellite in March. As previously reported, the Telstar 14/Estrela do Sul 1 communications satellite fully deployed its South solar array but only partially deployed its North solar array. An investigation into the cause of the anomaly and the implementation of any corrective actions is ongoing.

Space Systems/Loral, the manufacturer of the satellite, is raising the satellite to geostationary orbit. Telstar 14/Estrela do Sul is generating enough power to operate a minimum of 17 Ku-band transponders, making it capable of meeting immediate customer requirements, as well as Brazilian government requirements.

The satellite, to be operated by Loral Skynet do Brasil at 63 degrees West longitude, was sent into space on January 10, 2004 on a Boeing Sea Launch Zenit-3SL rocket from the Odyssey Launch Platform, positioned on the equator in the Pacific Ocean. It is insured for partial and total losses up to a maximum of $250 million.

Loral Space & Communications is a satellite communications company. It owns and operates a global fleet of telecommunications satellites used by television and cable networks to broadcast video entertainment programming, and by communication service providers, resellers, corporate and government customers for broadband data transmission, Internet services and other value-added communications services. Loral also is a world-class leader in the design and manufacture of satellites and satellite systems for commercial and government applications including direct-to-home television, broadband communications, wireless telephony, weather monitoring and air traffic management.

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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, Loral Space & Communications Ltd. or its representatives have made or may make forward-looking statements, orally or in writing, which may be included in, but are not limited to, various filings made by Loral with the Securities and Exchange Commission, press releases or oral statements made with the approval of an authorized executive officer of Loral. 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 include those related to the filing, on July 15, 2003 by Loral and certain of its subsidiaries, of voluntary petitions for reorganization under Chapter 11 of Title 11 of the United States Code in the United States District Court for the Southern District of New York and parallel insolvency proceedings in the Supreme Court of Bermuda in which certain partners of KPMG were appointed as joint provisional liquidators. Additional factors and conditions are also described in the section of Loral's annual report on Form 10-K for the fiscal year ended December 31, 2003, entitled "Certain Factors That May Affect Future Results," and Loral's other filings with the Securities and Exchange Commission. The reader is specifically referred to these documents.