Hughes Communications calls 9½% notes at 102.375 after EchoStar merger

By Susanna Moon

Chicago, June 9 - Hughes Communications, Inc. plans to redeem its 9½% senior notes due 2014 in connection with the merger with a wholly owned subsidiary of EchoStar Corp., according to an 8-K filing with the Securities and Exchange Commission.

The redemption price is 102.375 plus accrued interest.

The company will use proceeds from a notes offering and EchoStar's cash on hand to pay the $627,391,667 purchase amount.

The merger closed on June 8.

As previously reported, Hughes expected to repay most of its debt, including the 9½% notes. The only debt expected to remain outstanding was the $115 million loan facility guaranteed by Coface, assuming lender consents are obtained.

EchoStar completed an upsized $2 billion issuance of notes on May 17 in two parts to fund the purchase of Hughes. The deal included an upsized $1.1 billion tranche of eight-year 6½% senior secured notes priced and an upsized $900 million tranche of 10-year 7 5/8% senior unsecured notes priced at par.

Echostar also received a commitment for $1.8 billion of bridge loans in February with Deutsche Bank leading the financing to help fund the Hughes acquisition.

The deal was valued at $2 billion in February, including the refinancing of debt.

EchoStar is an Englewood, Colo.-based provider of equipment sales, digital broadcast operations and satellite services. Hughes is a Germantown, Md.-based provider of broadband satellite networks and services.

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