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Moody’s gives Ba3 to DISH convertibles
Moody's Investors Service said it assigned a Ba3 (LGD5) rating to DISH Network Corp.’s $1 billion convertible notes due 2024.
Proceeds will be used for general corporate purposes and strategic transactions, which may include wireless and spectrum-related strategic transactions.
The new notes are unsecured obligations issued by the parent, DISH, and are not guaranteed by the company's subsidiaries.
This assignment will not impact DISH's Ba3 corporate family rating, Ba2-PD probability of default rating or DISH's pay-TV subsidiary, DISH DBS' Ba3 senior unsecured debt ratings, but it does weakly position those ratings.
DISH has $2.1 billion of bonds maturing over the next 15 months, which Moody’s said it expects the company to pay off with free cash flow, reducing leverage to under 4.75 times (Moody's adjusted) absent any EBITDA growth.
“Our leverage tolerance for DISH to sustain its Ba3 CFR is under 5x (Moody's adjusted). If the company raises additional debt through 2018 and does not reduce leverage below this threshold or add its spectrum holdings to the restricted group supporting the DISH DBS subsidiary, there will be negative pressure on the ratings,” the agency said in a news release.
The speculative grade liquidity (rating is SGL-3 and the outlook remains stable.
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