[LORAL LETTERHEAD]

FOR IMMEDIATE RELEASE

                                                                          NEWS

                                                        Contact: Jeanette Clonan
                                                                   Tony Doumlele
                                                                  (212) 697-1105


               LORAL COMMENCES EXCHANGE OFFER FOR PREFERRED STOCK

                      Continues Strategy to Reduce Leverage



NEW YORK - August 27, 2002 - Loral Space & Communications (NYSE: LOR) has
commenced an exchange offer for all of its outstanding preferred stock as part
of its ongoing strategy to reduce debt and increase its financial flexibility,
it was announced today by Bernard L. Schwartz, chairman and chief executive
officer.

The company said it continues to generate substantial positive cash flow from
operations and has decided to take this step to enhance its balance sheet by
further reducing its fixed obligations. Loral has successfully implemented
previous exchanges for its preferred stock.

Loral said that it is offering to exchange $1.92 in cash and four shares of
Loral common stock for each share of its Series C and Series D preferred stock.
The offer represents a total of $3.96 for each share of Series C and D preferred
stock, based on today's closing price of $.51 for Loral common stock.

As of June 30, 2002, there were 8,084,174 outstanding shares of the Series C
preferred stock and 3,391,688 outstanding shares of the Series D preferred
stock. If all of the preferred shares participate, Loral will exchange $22
million in cash and 45.9 million common shares for preferred stock that has a
liquidation preference of $574 million.

The offer is contingent on participation of a minimum of 50 percent, in the
aggregate, of all outstanding shares of the two series of preferred stock.

The offer extends to all outstanding shares of the Series C and D Preferred
issues, and remains open until 12:00 a.m. midnight, New York City time,
September 25, 2002, unless extended.


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In connection with this financial strategy, Loral's Board of Directors has
approved a plan to suspend indefinitely the future payment of dividends on its
two series of preferred stock. Accordingly, Loral will defer the payment of
quarterly dividends due on its Series C preferred stock on November 1, 2002, and
its Series D preferred stock on November 15, 2002. Dividends on the two series
will continue to accrue.

Documents describing the exchange offer in greater detail are being mailed to
holders of Series C and Series D Preferred Stock. Series C and D shareholders
who wish to participate in the exchange offer should contact the company's
information agent, Morrow & Co., Inc., at (800) 607-0088. Exchanges will be
effected by The Bank of New York, the exchange agent for the offer.

Loral Space & Communications is a high technology company that concentrates
primarily on satellite manufacturing and satellite-based services. For more
information, visit Loral's web site at www.loral.com.

                                      # # #

This announcement is neither an offer to purchase nor a solicitation of an offer
to sell shares of Series C Convertible Redeemable Preferred Shares due 2006 or
Series D Convertible Redeemable Preferred Shares due 2007 of Loral Space &
Communications Ltd. Loral intends to file an offer to exchange and a letter of
transmittal with the United States Securities and Exchange Commission ("SEC")
relating to its offer to exchange outstanding Series C Preferred Shares and
Series D Preferred Shares for cash and shares of Loral common stock. Before
any decision is made with respect to the offer, all holders of Series C
Preferred Shares and Series D Preferred Shares are strongly advised to read
the offer to exchange and letter of transmittal when these documents become
available. These and other documents filed with the SEC will contain important
information relating to the offer. These documents will be available at no
charge on the SEC's website at http://www.sec.gov. Copies of the offer to
exchange and certain related documents may be obtained from Loral for free by
contacting the information agent for the offer, Morrow & Co., Inc.

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. 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, which 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.


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