Equity investment analyst Andres Coello from Scotiabank has issued an update for satellite operator AST SpaceMobile (AST) now that AST has successfully unfurled its five solar arrays. The bank’s view states: “Impressive execution should unlock cheaper credit and accelerate prepayments.”

The bank was impressed and stated that the 23-day period from launch to unfurling the first of the five new satellites should further de-risk AST’s technology on a number of fronts.

It also praised apparent progress on the building of the next batch of 17 ‘BlueBird’ craft, each ten-times more powerful that this first five. The bank says the launch campaign will commence in the New Year.

Scotiabank highlighted the fact that AST is on its way to securing the first-ever ‘Supplemental Coverage from Space’ (SCS) licence from the FCC and that it was also looking likely that rival SpaceX and its Starlink direct-to-cellular system was to suffer a “potential rejection” of its request to the FCC to grant it a waiver and allow its service to start beyond the current limited test transmissions.

The bank said that AST’s current credit line was expensive – at a 14.75 per cent rate of interest – and that the credit facility was more like a mortgage on AST’s Texas factory. The bank said it believes the successful unfurling will likely lead to a much more favourable borrowing rate which it suggests could be about 5 per cent.

Scotiabank reminds investors that it believes AST has the potential to become the world’s largest wireless company by subscribers. It stays with its ‘BUY’ recommendation and a $45.90 share price target. Its actual share price on October 29th was $26.73.

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Tags: AST SpaceMobile, bank