EchoStar planning $3bn bond sale
February 19, 2024
By Chris Forrester
EchoStar, which now owns Dish Network, and having suffered two reversals in its plans to raise fresh borrowings, is now contemplating raising $3 billion (€2.78bn) by issuing debt which is backed by its spectrum assets.
A report from Bloomberg says that EchoStar could issue new notes backed by 20 MHz of its AWS-4 terrestrial spectrum, made up of the spectrum licences it inherited from Dish Network on January 10th.
EchoStar faces some pressing debt repayment obligations in terms of a $1 billion convertible bond maturity on March 15th, $2 billion Dish DBS notes due November 15th, and a $420 million pending buyout.
However, the debt market for fresh borrowings may not look at EchoStar’s requests. The FT on February 16th, said that the company’s new ideas could be considered “audacious” adding “no one trusts Charlie [Ergen] and everyone is on edge.”
Indeed, one investor (The Buxton Helmsley Group, Inc.,BHG) released an open letter to the Board of Directors of EchoStar Corp, alleging fraud in certain financial statements.
In this letter, BHG highlights the existence of additional “triggering events” that necessitate the disclosure of asset value depreciation expenses in accordance and what it perceives as significant misstatements in financial disclosures, particularly the undisclosed asset value depreciation expenses, as well as potential fraudulent conveyances that followed BHG’s private notification to the company on December 27th 2023. This notification revealed findings of net asset insolvency at DISH Network Corp.