NEW YORK - February 25, 2002 - Loral Space & Communications (NYSE:LOR) announced today that it was notified by an International Chamber of Commerce arbitration panel in Geneva, Switzerland, that the panel has affirmed the validity of Space System/Loral's termination of its agreements with Paris-based Alcatel Space concerning the satellite manufacturing business, effective February 22, 2002.

The agreements between Alcatel and SS/L were terminable on one year's notice and, on February 22, 2001, Loral gave notice to Alcatel that they would expire on February 22, 2002. While Alcatel maintained that the notice was not effective, the panel ruled in Loral's favor on this matter. The agreements are therefore terminated.

The agreements with Alcatel date back to 1991 and have outlived their usefulness due to the evolution of the space industry and the emergence of Alcatel as a direct competitor of Loral's.

In the arbitration, Alcatel's assertion that there were various breaches of the agreements was upheld. Alcatel claimed that certain provisions of the agreements relating to the exchange of information, along with certain procedural or administrative provisions, were violated by Loral. Loral believes that Alcatel's claims for damages are completely without merit. The panel will decide whether those breaches gave rise to damages at a later date.

Loral Space & Communications is a high technology company that concentrates primarily on satellite manufacturing and satellite-based services.

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, 2000, 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.