A subsidiary of US DTH giant Dish Network has priced notes worth a combined US$1.9bn to refinance debt.
Through DISH DBS Corporation, the group priced US$900m of 5-year senior notes at par with a 4.625% coupon. It also priced US$1bn of 10-year senior…
A subsidiary of US DTH giant Dish Network has priced notes worth a combined US$1.9bn to refinance debt.
Through DISH DBS Corporation, the group priced US$900m of 5-year senior notes at par with a 4.625% coupon. It also priced US$1bn of 10-year senior notes at par with a coupon of 5.875%.
Deutsche Bank is reportedly managing the sale, which the company expects to close on 16 May.
The notes were rated Ba2 by Moody’s and BB- by Standard & Poor’s.
Dish said the proceeds will be used for general corporate purposes, but declined to comment further, although some reports have claimed that the offering will be used to pre-fund the outstanding US$1.5bn of bonds due in 2013 and 2014.
Dish has US$500m worth of 7% 7-year notes maturing in October 2013, and US$1bn worth of 6.625% 10-year notes due in October 2014, according to an SEC filing on 7 May.
It also holds US$750m of 7.75% notes due 2015, US$1.5bn of 7.125% notes due 2016, US$1.4bn of 7.875% notes due 2019, and US$2bn worth of 6.75% notes due 2021.
On 7 May, Dish posted Q1 2012 revenue of US$3.58bn, which, although an 11% increase compared with US$3.22bn for the corresponding period last year, was below reported analyst expectations of US$3.62bn.
The company is currently awaiting an FCC ruling over whether it can utilise spectrum assets derived from last year’s acquisition of mobile satellite operators TerreStar Networks and DBSD North America to deploy a terrestrial-only wireless broadband network in the US. These spectrum licenses were acquired out of bankruptcy protection in a transaction that eventually closed on 9 March 2012.
“As a result of the completion of the DBSD transaction and the TerreStar transaction, Dish Network will likely be required to make significant additional investments or partner with others to, among other things, finance the commercialisation and build-out requirements of these licenses,” stated the company in 7 May’s SEC filing.
The company added: “Depending on the nature and scope of such commercialisation and build-out, any such investment or partnership could vary significantly, which may affect our future financial condition or results of operations. There can be no assurance that Dish Network will be able to develop and implement a business model that will realize a return on these spectrum investments or that Dish Network will be able to profitably deploy the assets represented by these spectrum investments.”
The deadline for comments on the FCC’s NPRM over whether Dish can roll out its intended services is 17 May 2012, with reply comments due before 1 June 2012.
Industry spectators have pointed to how Dish could seek partnerships with US telcos, such as AT&T or Verizon Wireless, which are seeking extra capacity to satisfy soaring demand for mobile services.
Meanwhile, unconfirmed reports suggest that Charlie Ergen, Dish’s chairman, is quietly buying up struggling US satellite/terrestrial LTE venture LightSquared’s debt, as the company negotiates a restructuring with its creditors.
