EchoStar Corporation Announces Successful Completion of Various Transformative Strategic Transactions Positioning its Business for the Further Enhancement of its Nationwide Open RAN 5G Network
Rhea-AI Summary
EchoStar (SATS) has completed several strategic transactions to enhance its nationwide Open RAN 5G Network. The company secured overwhelming support from $5 billion of DISH Network convertible noteholders with over 96% participation in exchange offers. The transactions include the issuance of $2.3 billion in 6.75% Senior Spectrum Secured Exchange Notes and $1.9 billion in 3.875% Convertible Senior Notes, both due 2030. Additionally, EchoStar raised $5.2 billion through new Senior Spectrum Secured Notes and $400 million through a PIPE transaction. These moves significantly improve the company's debt maturity profile, leaving only $139 million in remaining debt maturities for 2024-2025.
Positive
- Secured $5.2 billion in fresh capital through new Senior Spectrum Secured Notes
- Raised additional $400 million through PIPE transaction
- Achieved 96% participation in exchange offers from existing noteholders
- Reduced near-term debt maturities to only $139 million for 2024-2025
- Successfully extended significant debt maturities to November 2030
Negative
- Taking on new high-interest debt at 10.75% for Senior Spectrum Secured Notes
- Substantial increase in total debt obligations
- Higher interest expense burden due to new 6.75% and 3.875% notes
News Market Reaction
On the day this news was published, SATS declined 12.90%, reflecting a significant negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
- Transactions highlight tremendous value of EchoStar's spectrum assets serving as the sturdy platform on which EchoStar will accelerate its deployment of a nationwide wireless service to vigorously compete with incumbent wireless carriers
- Overwhelming support from approximately
$5 billion 96% participation in exchange offers, leaving only$139 million - Settlement of exchange offers results in EchoStar's issuance of approximately
$2.3 billion 6.75% Senior Spectrum Secured Exchange Notes due 2030 and approximately$1.9 billion 3.875% Convertible Senior Spectrum Secured Notes due 2030 - Closing of new
10.75% Senior Spectrum Secured Notes due 2029 by EchoStar delivers$5.2 billion - Closing of PIPE transaction delivers
$400 million - Deployment of previously funded capital from secured financing facility from TPG Angelo Gordon and certain co-investors satisfies DDBS November 2024 maturity in full and clears DDBS debt maturity runway until July 2026
"We are optimistic for the bright future ahead following the completion of these transactions that position our business for success. The significant additional capital raised by our business, together with our successful efforts to improve our debt maturity profile, will allow us to continue to invest in our nationwide Open RAN 5G network, and secure profitable customer acquisition and retention," said Hamid Akhavan, president and CEO, EchoStar Corporation. "We paved the way for EchoStar to successfully compete in the
EchoStar Balance Sheet Optimization Transactions
EchoStar announced the final results of its previously announced offers to exchange (the "exchange offers") (i) any and all of the approximately
As reported by D.F. King & Co., Inc., the exchange agent and information agent for the exchange offers, as of the expiration date of the exchange offers, an aggregate principal amount of
The overwhelming support from our existing stakeholders evidenced by over
Furthermore, EchoStar today announced the deployment of the previously funded capital provided from the secured financing facility from TPG Angelo Gordon and certain co-investors to satisfy in full the approximately
EchoStar's Comprehensive Financing and Liquidity Solution Transactions
Coupled with EchoStar's announcements related to its balance sheet optimization transactions, EchoStar also today announced the closing of its previously announced issuance of its new
Furthermore, EchoStar today announced the closing of its previously announced issuance of its Class A common stock, par value
The significant capital infusion resulting from these transactions will be deployed by EchoStar towards continued investment in its nationwide Open RAN 5G network and other general corporate purposes, including profitable customer acquisition and retention efforts and strengthening our consumer offerings.
Advisors
White & Case LLP served as exclusive legal advisor to EchoStar in connection with each of the foregoing transactions. Houlihan Lokey, Inc. served as financial advisor to EchoStar for certain of such transactions and as dealer manager and solicitation agent in connection with the exchange offers.
Cahill Gordon & Reindel LLP served as legal advisor to the dealer manager and solicitation agent for the exchange offers.
Centerview Partners served as exclusive financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP served as exclusive legal advisor to the ad hoc group of holders of 2025 DISH Convertible Notes, and Perella Weinberg Partners served as exclusive financial advisor and Akin Gump Strauss Hauer & Feld LLP served as exclusive legal counsel to the ad hoc group of holders of 2026 DISH Convertible Notes.
About EchoStar Corporation
EchoStar Corporation (Nasdaq: SATS) is a global fully integrated communications and content delivery leader and provider of technology, spectrum, engineering, manufacturing, networking services, television entertainment and connectivity, offering consumer, enterprise, operator and government solutions worldwide under its EchoStar®, Boost Mobile®, Sling TV, DISH TV™, Hughes®, HughesNet®, HughesON™, and JUPITER™ brands. In
©2024 EchoStar. Hughes, HughesNet, DISH and Boost Mobile are registered trademarks of one or more affiliate companies of EchoStar Corp.
Forward-looking Statements
This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act, including, in particular, statements about plans, objectives and strategies, growth opportunities in our industries and businesses, our expectations regarding future results, financial condition, liquidity and capital requirements, estimates regarding the impact of regulatory developments and legal proceedings, and other trends and projections. Forward-looking statements are not historical facts and may be identified by words such as "future," "anticipate," "intend," "plan," "goal," "seek," "believe," "estimate," "expect," "predict," "will," "would," "could," "can," "may," and similar terms. These forward-looking statements are based on information available to us as of the date hereof and represent management's current views and assumptions. Forward-looking statements are not guarantees of future performance, events or results and involve known and unknown risks, uncertainties and other factors, which may be beyond our control. Accordingly, actual performance, events or results could differ materially from those expressed or implied in the forward-looking statements due to a number of factors. Additional information concerning these risk factors is contained in each of EchoStar's and DISH's most recently filed Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, and in EchoStar's subsequent Current Reports on Form 8-K, and other SEC filings. All cautionary statements made or referred to herein should be read as being applicable to all forward-looking statements wherever they appear. You should consider the risks and uncertainties described or referred to herein and should not place undue reliance on any forward-looking statements. The forward-looking statements speak only as of the date made. We do not undertake, and specifically disclaim, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Should one or more of the risks or uncertainties described herein or in any documents we file with the SEC occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements.
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SOURCE EchoStar Corporation
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