Satellite broadcaster DISH Network doubled the size of its bond offering to raise US$2bn in ten-year senior secured notes.
DISH had initially launched planned to raise US$1bn through the private placement but following strong demand decided to up the…
Satellite broadcaster DISH Network doubled the size of its bond offering to raise US$2bn in ten-year senior secured notes.
DISH had initially launched planned to raise US$1bn through the private placement but following strong demand decided to up the size by US$750m. The company then increased the offering by an additional US$250m to US$2bn.
The debt financing was DISH’s first foray into the bond markets since September 2009 and took advantage of a surge in investor appetite for US junk-rated notes. Moody’s rated the debt Ba3 while S&P gave it a BB- rating.
The bonds, which were sold via subsidiary DISH DBS Corporation, carry a coupon of 6.75% and priced at 99.09 to yield 6.875%. SatelliteFinance understands that Deutsche Bank was lead bookrunner for the offering, with Jefferies & Co joint lead manager.
DISH stated that net proceeds from the offering are intended to be used for general corporate purposes. This is likely to include the repayment of the US$1bn outstanding of DISH notes due October 2011.
… finally settles TiVo patent battle
After more than six years in the courts, DISH and EchoStar have finally settled their prolonged patent litigation with digital video recording (DVR) pioneer TiVo.
Under the terms of the settlement, DISH and EchoStar will pay TiVo US$500m over the next six years. The companies will pay an upfront fee of US$300m with the remaining US$200m distributed in six equal annual instalments between 2012 and 2017. In return, TiVo will dismiss all pending litigation and injunctions against the Charlie Ergen owned enterprises.
As part of the agreement the two parties have granted certain patent licences to each other connected to DVR-enabled products, while TiVo will also play a role in helping DISH Network promote the Blockbuster digital video service. DISH won the bankruptcy auction for Blockbuster last month paying approximately US$320m for the beleaguered movie rental chain.
Tom Rogers, president and CEO of TiVo commented: “We are extremely pleased to reach an agreement with DISH Network and EchoStar which recognizes the value of our intellectual property. The compensation from this settlement, including the resulting reduction in legal expenditures, puts TiVo in an enviable financial and strategic position. This settlement, which brings the total compensation paid by DISH Network for use of TiVo’s 389 patent family to over US$600m, demonstrates the significant return afforded to our shareholders by diligent enforcement of TiVo’s intellectual property rights. Those efforts will aggressively continue with other parties.”
While Charlie Ergen, chairman and CEO of DISH Network, said: “The results of TiVo’s formidable intellectual property enforcement program speak for themselves, and consequently, we are pleased to put this litigation behind us and move forward. Additionally, we believe that our agreement with TiVo provides us a competitive advantage as one of the few multichannel operators with rights to operate under TiVo’s Time Warp patent.”
Industry reaction to the announcement was mixed with a number of analysts arguing that the settlement was much lower than they had estimated. Rating agency Moody’s senior vice president Neil Begley commented, “The settlement resulted in a cost considerably less than we expected.”
The market seem to concur with this view with DISH’s share price rising almost 15% since the announcement while TiVo’s fell by around 2.5%. However, one analyst told SatelliteFinance that now that the uncertainty surrounding the legal battle has finally been resolved, TiVo’s share price should rebound quickly particularly as it is now a far more likely acquisition target.
