Moody’s signals Dish offers distressed

Moody’s Investors Service said it will likely consider the planned debt exchanges by Dish Network Corp. (Dish) and Dish DBS Corp., a wholly-owned subsidiary of Dish, distressed exchanges.

On Friday, Dish’s parent Echostar Corp. announced it is offering to exchange Dish’s 0% convertible notes due 2025 and 3.375% convertible notes due 2026 at exchange considerations substantially below par value for 10% backed senior secured notes due 2030 to be issued by Echostar.

On Tuesday, Echostar announced that its newly formed subsidiary, Dish DBS Issuer LLC, is offering to exchange any of four separate DBS senior notes at exchange considerations primarily at significantly under par valuations for 10% senior secured notes due 2030; these four senior notes included DBS's 5 7/8% senior notes due 2024, 7¾% senior notes due 2026, 7 3/8% senior notes due 2028 and 5 1/8% senior notes due 2029.

“Moody's considers a distressed exchange as a form of default. A distressed exchange is defined as an offer by an issuer to creditors of a new or restructured debt, or a new package of securities, cash or assets, that amount to a diminished financial obligation relative to the original obligation with the effect of the transaction being the avoidance of an eventual payment default on the debt,” the agency said in a press release.

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