News and Analysis
DISH fields spectrum financing interest to support potential merger
- Max Frumes
- +Rachel Butt
•2 min read
DISH Network has been sounding out proposals from third parties to help support its parent company Echostar's potential merger with DirecTV, according to 9fin sources.
The new funding would be backed by spectrum licenses, according to the sources.
DISH’s bonds shot up after reports surfaced late last week that its parent company EchoStar is in the early stages of talks over a potential merger with DirectTV, its only other major satellite TV competitor. The news came ahead of DISH’s $2bn 5.875% SUNs coming due this November. Those bonds are currently quoted at approximately 98 cents on the dollar.
Meanwhile, DISH’s $1bn SUNs due 2028 are quoted at around 70 cents on the dollar, and the $1.5bn SUNs due 2029 are at roughly 61. Both notes have bounced back from the 40s and 50s after Echostar’s acquisition of DISH and the company’s controversial transfer of assets to a new subsidiary.
Various groups of DISH/Echostar and DISH DBS creditors have recently entered into private negotiations with the company, as reported. Echostar had warned that the recently combined company did not have enough cash and/or projected cash flows to fund Q4 24 operations or address the November 2024 debt maturity.
As of 30 June, it had just $520.6m of liquidity, consisting of $419.2m of cash on hand and $101.3m of marketable investment securities.
Other than the upcoming debt wall, DISH/Echostar is also mired in a legal dispute stemming from the series of transactions following Echostar’s merger with DISH Network, in which the company transferred several spectrum assets valued at $9bn, rerouted an intercompany loan of $4.7bn and moved 3 million DISH TV subscriber contracts from Dish DBS and DISH Network into unrestricted subsidiaries.
A group of crossholders, represented by Milbank, has filed a lawsuit challenging the asset transfers into unrestricted subsidiaries. The complaint, which 9fin summarized here, alleged “a brazen series of related transactions” involving “billions of dollars of assets” breached their indentures and constituted actual and/or constructive fraudulent transfers.
EchoStar/DISH has been advised by Houlihan Lokey and White & Case in creditor talks.
Representatives at Echostar, Houlihan and White & Case didn’t immediately respond to requests for comment.
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