US DTH provider Dish Network has sold a US$2.6bn two-tranche bond and is reportedly close to securing at least US$6.5bn in syndicated loans as it aims to get committed financing for its US$25.5bn bid for Sprint Nextel.
Dish has mandated Barclays,…
US DTH provider Dish Network has sold a US$2.6bn two-tranche bond and is reportedly close to securing at least US$6.5bn in syndicated loans as it aims to get committed financing for its US$25.5bn bid for Sprint Nextel.
Dish has mandated Barclays, Jefferies, Macquarie and Royal Bank of Canada to raise the debt. The banks were joint bookrunners on the note offering, and are also said to be providing syndicated loans according to various reports. The loans would be refinanced with bonds at a later date, the Financial Times reported.
The US$2.6bn bond was split between a four-year tranche and a 10-year tranche. Dish sold US$1.35bn of 10-year 6.25% senior notes at par. It also issued US$1.25bn in four-year 5% senior notes which priced at par. The offering, expected to close on 28 May, was rated BB- by S&P and Ba3 by Moody’s.
The proceeds will be placed in escrow and will be released should a deal with Sprint be agreed. If Dish fails with its bid for Sprint or withdraws the offer the DTH giant is duty bound to redeem the paper.
Once Dish has secured the total US$9bn financing it should be allowed to look at Sprint’s books, the satellite broadcaster’s chairman Charlie Ergen said last week. “That is the last remaining obstacle prior to us getting access to due diligence and potentially being a superior bid,” he said.
Dish’s bid rivals that of Japan’s Softbank, which struck a US$20.1bn deal to acquire Sprint last October. At the end of April Softbank’s CEO Masayoshi Son said there was uncertainty around Dish’s bid because the US bidder did not have committed financing.
“They have never done this scale of financing,” Son said in a press conference.
Sprint’s special committee is still evaluating Dish’s bid, while its shareholders are set to vote on Softbank’s offer at an EGM on 12 June.
