EchoStar starts exchange offers, consent bids for DISH convertibles

Chicago, Jan. 12 – EchoStar Corp. started an exchange offer and consent solicitations for the $1,957,197,000 outstanding 0% convertible senior notes due 2025 (Cusip: 25470MAF6) and $2,908,801,000 outstanding 3.375% convertible senior notes due 2026 (Cusip: 25470MAB5) issued by DISH Network Corp., according to a press release late in the evening on Friday.

The exchange offer is intended to reduce aggregate debt and materially extend the debt maturity profile providing a significant runway for “continued strategic investment and opportunity to combine DISH Network's satellite technology, streaming services and nationwide 5G network with EchoStar's premier satellite communications solutions.”

EchoStar is offering to exchange the notes for 10% senior secured notes due 2030 to be issued by Echo Star. The notes would be guaranteed on a senior secured basis by EchoStar’s indirect subsidiary DBSD Corp. and secured by first priority liens on the 20 MHz of AWS-4 spectrum, and EchoStar’s indirect subsidiary, DBSD Services Ltd. which will provide a security interest consisting of a first priority pledge of the equity interests of DBSD. EchoStar estimates that the fair market collateral securing the notes at approximately $9 billion. The EchoStar Notes will not have recourse to any assets of any other subsidiary of EchoStar other than as set forth above.

The exchange consideration for the 0% convertibles is $610 of new notes per $1,000 note. The exchange consideration offered for the 3.375% notes is $510 of new notes per $1,000 note.

In a footnote, the total figures of the amount outstanding on each of the notes is net of $42,803,000 and $91,199,000 held by DISH and not deemed outstanding.

Consents

EchoStar is also soliciting consents from holders of each series to eliminate certain events of default and substantially all of the restrictive covenants in each indenture including the merger covenant, the reporting covenant and to make certain conforming changes to each indenture. To consent, holders must tender their notes. Holders may not tender their notes without consenting to the proposed amendments.

Details

Each exchange offer and consent solicitation is a separate offer and/or solicitation. There is a minimum tender condition.

The exchange offers and consent solicitations will expire at 11:59 p.m. ET on Feb. 9.

White & Case LLP is acting as legal adviser to EchoStar and D.F. King & Co., Inc. is acting as exchange agent and information agent for the exchange offers and consent solicitations.

EchoStar is an Englewood, Colo.-based provider of equipment sales, digital broadcast operations and satellite services.

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