ENGLEWOOD, Colo., Jan. 16,
2024 /PRNewswire/ -- EchoStar Corporation (Nasdaq:
SATS) ("EchoStar") today announced that its newly formed
subsidiary DISH DBS Issuer LLC ("DBS Issuer") (also known as
DBS Subscriber Subsidiary) has commenced offers (the "Exchange
Offers") to Eligible Holders (as defined below) to exchange (x)
up to $1,000,000,000 aggregate
principal amount of the 5.875% Senior Notes due 2024 (the "DBS
2024 Notes") issued by DISH DBS Corporation ("DBS"), a
subsidiary of EchoStar, for Series 2024-1 Class A-1 10.00% Senior
Secured Notes due 2030 (the "DBS Issuer Class A-1 Notes")
and (y) up to an aggregate principal amount described below of (i)
the 7.75% Senior Notes due 2026 issued by DBS (the "DBS 2026
Notes"), (ii) the 7.375% Senior Notes due 2028 (the "DBS
2028 Notes") and (iii) the 5.125% Senior Notes due 2029 (the
"DBS 2029 Notes," and together with the DBS 2024 Notes, the
DBS 2026 Notes and the DBS 2028 Notes, the "Existing DBS
Notes"), each for 2024-1 Class A-2 10.00% Senior Secured Notes
due 2034 (the "DBS Issuer Class A-2 Notes" and, together
with DBS Issuer Class A-1 Notes, the "DBS Issuer Notes").
The DBS Issuer Notes are to be issued by DBS Issuer, in each case,
pursuant to the terms described in an exchange offer memorandum and
consent solicitation statement, dated January 16, 2024 (the "Exchange Offer
Memorandum"). The DBS Issuer Notes will be secured by the
assets of DBS Issuer, which include approximately 3.0 million DISH
TV subscribers.
The maximum aggregate principal amount of DBS Issuer Notes that
will be issued to eligible holders of Existing DBS Notes pursuant
to the Exchange Offers is $3,000,000,000, subject to adjustment as
described below:
(1) no more than
$1,000,000,000 aggregate principal
amount of the DBS 2024 Notes (the "2024 Notes Tender Cap");
and
(2) the maximum
aggregate principal amount of (i) DBS Issuer Class A-1 Notes that
will be issued is $1,000,000,000 (the
"Maximum Offered Class A-1 Notes Amount") and (ii) DBS
Issuer Class A-2 Notes that will be issued is $3,000,000,000 less the aggregate principal
amount of any DBS Issuer Class A-1 Notes issued (the "Maximum
Offered Class A-2 Notes Amount").
DBS Issuer reserves the right, in its sole discretion, subject
to applicable law, to increase or decrease the 2024 Notes Tender
Cap, the Maximum Offered Class A-1 Notes Amount, the Maximum
Offered Class A-2 Notes Amount and/or the Maximum Offered Notes
Amount, but there can be no assurance that DBS Issuer will do so.
This could result in DBS Issuer purchasing a greater or lesser
aggregate principal amount of Existing DBS Notes in the Offers and
issuing a greater or lesser aggregate principal amount of DBS
Issuer Notes.
Existing DBS Notes accepted for exchange into DBS Issuer Class
A-2 Notes on any settlement date will be accepted in accordance
with the priority levels (the "Acceptance Priority Levels")
set forth below (with "1" being the highest Acceptance Priority
Level and "3" being the lowest Acceptance Priority Level). Only the
Existing DBS Notes being exchanged for DBS Issuer Class A-2 Notes
will be subject to the Acceptance Priority Levels.
The following table describes certain terms of the exchange
offers:
Title of
Existing
DBS Notes
|
CUSIP
Number(1)
(Rule 144A/Reg
S)
|
ISIN(1)
(Rule 144A/Reg
S)
|
Tender
Cap
|
Principal
Amount
Outstanding
|
Acceptance
Priority
Level
|
DBS
Issuer
Notes
|
Exchange
Consideration(4)
|
Early
Exchange
Premium(4)(5)
|
Total
Consideration(4)(6)
|
5.875% Senior Notes due
2024
|
25470XAW5 /
U25486AL2
|
US25470XAW56 /
USU25486AL24
|
$1,000,000,000(2)
|
$1,982,544,000(3)
|
N/A
|
Class A-1
Notes
|
$ 950.00
|
$
50.00
|
$
1,000.00
|
7.75% Senior Notes due
2026
|
25470XAY1 /
U25486AM0
|
US25470XAY13 /
USU25486AM07
|
N/A
|
$2,000,000,000
|
1
|
Class A-2
Notes
|
$ 610.00
|
$
50.00
|
$
660.00
|
7.375% Senior Notes due
2028
|
25470XBB0 /
U25486AN8
|
US25470XBB01 /
USU25486AN89
|
N/A
|
$1,000,000,000
|
2
|
Class A-2
Notes
|
$ 450.00
|
$
50.00
|
$
500.00
|
5.125% Senior Notes due
2029
|
25470XBD6 /
U25486AP3
|
US25470XBD66 /
USU25486AP38
|
N/A
|
$1,500,000,000
|
3
|
Class A-2
Notes
|
$ 380.00
|
$
50.00
|
$
430.00
|
|
|
(1)
|
No representation is
made as to the correctness or accuracy of the CUSIP numbers or
ISINs listed in this press release or printed on the Existing DBS
Notes. They are provided solely for convenience.
|
(2)
|
No more than the 2024
Notes Tender Cap of 5.875% Senior Notes due 2024 (as it may be
increased or decreased by DBS Issuer in its sole discretion)
will be purchased in the Exchange Offers.
|
(3)
|
Net of $17,456,000 of
5.875% Senior Notes due 2024 that are held by DISH Network
Corporation and not deemed outstanding.
|
(4)
|
Consideration in the
form of principal amount of DBS Issuer Notes per $1,000
principal amount of Existing DBS Notes that are validly tendered
and accepted for exchange, subject to any rounding as described in
the Exchange Offer Memorandum. Excludes accrued interest, which
will be paid in cash in addition to the Exchange Consideration or
the Total Consideration, as applicable.
|
(5)
|
The Early Exchange
Premium will be payable to Eligible Holders who validly tender
Existing DBS Notes at or prior to the Early Tender
Time.
|
(6)
|
Includes the Early
Exchange Premium for Existing DBS Notes validly tendered at or
prior to the Early Tender Time.
|
The DBS Issuer Notes will be secured by all of DBS Issuer's
interests in its subscription and equipment agreements (as
described in the Exchange Offer Memorandum). The DBS Issuer Notes
will not have recourse to any assets of EchoStar or any of its
other subsidiaries.
Concurrently with the Exchange Offers, DBS Issuer is soliciting
consents (the "Consent Solicitations" and together with the
Exchange Offers, the "Offers") from holders of each series
of the Existing DBS Notes to amend the terms of the applicable
series of Existing DBS Notes and the indentures governing such
Existing DBS Notes (the "Existing Indentures") to, among
other things, eliminate certain events of default (including any
defaults related to any payment default or acceleration of certain
indebtedness and defaults related to the bankruptcy of DBS) and
substantially all of the covenants in each such indenture and the
Existing DBS Notes of the applicable series, including, but not
limited to, limitations on restricted payments, dividend
restrictions, indebtedness, liens, asset sales, affiliate
transactions, reporting and mergers, and to make certain conforming
changes to each such indenture and the Existing DBS Notes of the
applicable series to reflect the proposed amendments (the
"Proposed Amendments"). Holders may not consent to the
Proposed Amendments without tendering the applicable Existing DBS
Notes in the relevant Exchange Offer, and holders may not tender
Existing DBS Notes of any series for exchange without consenting to
the Proposed Amendments for such series.
Each Exchange Offer and Consent Solicitation will expire
immediately after 11:59 p.m.,
New York City time, on
February 12, 2024, or any other date
and time to which DBS Issuer extends such period for such Exchange
Offer and Consent Solicitation in its sole discretion (such date
and time, as it may be extended, the "Expiration Time"),
unless earlier terminated.
To be eligible to receive the applicable total consideration
(the "Total Consideration") in the applicable Offer,
Eligible Holders must validly tender and not validly withdraw their
Existing DBS Notes and validly deliver and not revoke their
consents at or prior to 5:00 p.m.,
New York City time, on
January 29, 2024, or any other date
and time to which DBS Issuer extends such period in its sole
discretion (such date and time for such Offer, as it may be
extended, the "Early Tender Time"). Eligible Holders validly
tendering their Existing DBS Notes after the applicable Early
Tender Time for an Offer and at or prior to the Expiration Time for
such Offer will only be eligible to receive the applicable exchange
consideration set forth in the table above (the "Exchange
Consideration"), which equals the applicable Total
Consideration less the applicable Early Exchange Premium set forth
in the table above.
Validly tendered Existing DBS Notes may be withdrawn and related
consents revoked, with respect to an Exchange Offer and Consent
Solicitation for any series of Existing DBS Notes at or prior to,
and not thereafter (subject to applicable law), in the case of any
series of Existing DBS Notes, the earliest of (i) the time of
execution of the Supplemental Indenture (as defined below) relating
to such series of Existing DBS Notes (which is expected to occur
promptly after receipt of the Requisite Consents (as defined below)
for such series), (ii) 5:00 p.m.,
New York City time, on
January 29, 2024, unless extended by
DBS Issuer in its sole discretion and (iii) the termination
of the Consent Solicitation with respect to such series of Existing
DBS Notes. The occurrence of such event with respect to a series of
Existing DBS Notes is referred to as the "Withdrawal Deadline" for
such series of Existing DBS Notes.
The 2024 Notes Tender Cap limits the maximum aggregate principal
amount of the DBS 2024 Notes that may be exchanged in the
applicable Offer to $1,000,000,000.
Accordingly, acceptance for tenders of DBS 2024 Notes may be
subject to proration if the aggregate principal amount DBS 2024
Notes validly tendered would result in the aggregate principal
amount of DBS 2024 Notes exchanged exceeding the 2024 Notes Tender
Cap.
DBS Issuer will exchange any Existing DBS Notes that have been
validly tendered at or prior to the Expiration Time and that it
chooses to accept for exchange, subject to all conditions to such
Exchange Offer and Consent Solicitation having been either
satisfied or waived by DBS Issuer, within three business days
following the Expiration Time or as promptly as practicable
thereafter (the settlement date of such exchange with respect to an
Exchange Offer and Consent Solicitation being referred to as the
"Settlement Date"), subject to the 2024 Notes Tender Cap,
the Maximum Offered Class A-1 Notes Amount, the Maximum Offered
Class A-2 Notes Amount, the Acceptance Priority Level and
proration.
Subject to the Maximum Offered Class A-2 Notes Amount, the
Acceptance Priority Level and proration, all Existing DBS Notes
subject to the Acceptance Priority Levels (the "Acceptance
Priority Notes") of a series validly tendered at or before the
Expiration Time having a higher Acceptance Priority Level will be
accepted before any Acceptance Priority Notes of another series
tendered at or before the Expiration Time having a lower Acceptance
Priority Level are accepted, even if the Acceptance Priority Notes
having a lower Acceptance Priority Level were tendered prior to the
applicable Early Tender Time and the Existing DBS Notes having a
higher Acceptance Priority Level were tendered after the Early
Tender Time but on or prior to the Expiration Time. Accordingly,
even if the Offers are fully subscribed such that the aggregate
Exchange Consideration issuable in respect of Acceptance Priority
Notes validly tendered equals at least the Maximum Offered Class
A-2 Notes Amount as of the applicable Early Tender Time, Acceptance
Priority Notes validly tendered at or before the applicable Early
Tender Time may be subject to proration if DBS Issuer accepts
Acceptance Priority Notes tendered after the applicable Early
Tender Time but on or prior to the Expiration Time that have a
higher Acceptance Priority Level than such Existing DBS Notes. In
such a scenario, DBS Issuer will (assuming satisfaction or waiver
of the conditions set forth in the Exchange Offer Memorandum with
respect to the Offers) accept all validly tendered Existing DBS
Notes and related consents on or prior to the Expiration Time on a
prorated basis based on the Acceptance Priority Level such that the
aggregate Exchange Consideration for the Acceptance Priority Notes
equals the Maximum Offered Class A-2 Amount (subject to rounding
down to the nearest $1,000). A
Consent Solicitation with respect to a series of Existing DBS Notes
will be terminated if the consents of holders of a majority in
aggregate principal amount of such series of Existing DBS Notes
outstanding, or in the case of certain amendments, 66 2/3%,
(excluding any DBS Senior Notes held by the Company or its
affiliates) (with respect to each series of Existing DBS Notes, the
"Requisite Consents") for such series are not obtained and,
in such case, the applicable Proposed Amendments for such series of
Existing DBS Notes will not become effective.
All Existing DBS Notes not accepted as a result of proration
will be rejected from the applicable Offer and will be promptly
returned to the tendering Eligible Holder.
Existing DBS Notes may be tendered and accepted for exchange
only in principal amounts equal to minimum denominations of
$2,000 and integral multiples of
$1,000 in excess thereof,
provided that the DBS Issuer Notes will be issued with
minimum denominations of $1,000 and
integral multiples of $1,000 in
excess thereof. If proration causes DBS to return less than the
minimum denomination of a series of Existing DBS Notes to an
Eligible Holder, then DBS Issuer will either accept all or reject
all of the Existing DBS Notes of such series tendered by such
Eligible Holder. The amount of DBS Issuer Notes to be issued to any
Eligible Holder will be rounded down to the nearest $1,000. Any fractional portion of DBS Issuer
Notes not received as a result of rounding down will be paid in
cash.
If the Requisite Consents to the applicable Proposed Amendments
are received and not revoked with respect to a series of Existing
DBS Notes, DBS and the trustee under the Existing Indenture
governing such series of Existing DBS Notes are expected to execute
a supplemental indenture to such Existing Indenture providing for
the Proposed Amendments (with respect to any such series of
Existing DBS Notes, a "Supplemental Indenture"), promptly
after receipt of such Requisite Consents. The Supplemental
Indenture will effect the Proposed Amendments only with respect to
such series of Existing DBS Notes for which the applicable
Requisite Consents were received and not revoked. The adoption of
the Proposed Amendments with respect to any series of Existing DBS
Notes is not conditioned upon the consummation of any other Consent
Solicitation or adoption of the Proposed Amendments in respect of
any other series of Existing DBS Notes or obtaining any Requisite
Consent with respect to any other series of Existing DBS Notes. The
failure to obtain the Requisite Consents with respect to any series
of Existing DBS Notes will not affect the ability of DBS to enter
into the Supplemental Indenture and cause the Proposed Amendments
to become effective for any other series of Existing DBS Notes. If
an Exchange Offer or the related Consent Solicitation with respect
to a series of Existing DBS Notes is terminated or withdrawn, the
Existing Indenture governing such series of Existing DBS Notes will
remain in effect in its present form with respect to such series of
Existing DBS Notes. However, if the Proposed Amendments for a
series of Existing DBS Notes become operative, holders of such
series of Existing DBS Notes who do not tender Existing DBS Notes
will be bound by the applicable Proposed Amendments, meaning that
their Existing DBS Notes will be governed by an Existing Indenture
as amended by the applicable Supplemental Indenture.
Each Exchange Offer and Consent Solicitation is a separate offer
and/or solicitation, and each may be individually amended,
extended, terminated or withdrawn, subject to certain conditions
and applicable law, at any time in DBS Issuer's sole discretion,
and without amending, extending, terminating or withdrawing any
other Exchange Offer or Consent Solicitation. No Offer is
conditioned upon any minimum principal amount of Existing DBS Notes
of any series being tendered nor the consummation of any other
Offer or Consent Solicitation. Additionally, notwithstanding any
other provision of the Offers, DBS Issuer's obligations to accept
and exchange any of the Existing DBS Notes validly tendered
pursuant to an Offer is subject to the satisfaction or waiver of
certain conditions, as described in the Exchange Offer Memorandum,
and DBS Issuer expressly reserves its right, subject to applicable
law, to terminate any Offer and/or Consent Solicitation at any
time.
The Offers are being made, and the applicable series of DBS
Issuer Notes are being offered, only to holders of the Existing DBS
Notes who are either (a) persons who are reasonably believed to be
"qualified institutional buyers" as defined in Rule 144A under the
Securities Act to whom the DBS Issuer Notes are offered in
the United States in a transaction
not involving a public offering, pursuant to Section 4(a)(2) of the
Securities Act or (b) persons other than "U.S. persons" as defined
in Regulation S under the U.S. Securities Act of 1933, as amended
(the "Securities Act"), who agree to purchase the DBS Issuer
Notes outside of the United States
and who are otherwise in compliance with the requirements of
Regulation S. The holders of Existing DBS Notes who have
certified to DBS Issuer that they are eligible to participate in
the Offers and Consent Solicitations pursuant to at least one of
the foregoing conditions are referred to as "Eligible
Holders." Eligible Holders may go to www.dfking.com/dish to
confirm their eligibility.
Full details of the terms and conditions of the Exchange Offers
and the Consent Solicitations are described in the Exchange Offer
Memorandum. The Exchange Offers and the Consent Solicitations are
only being made pursuant to, and the information in this press
release is qualified in its entirety by reference to, the Exchange
Offer Memorandum, which is being sent by DBS Issuer to Eligible
Holders of the Existing DBS Notes. Eligible Holders of the Existing
DBS Notes are encouraged to read these documents, as they contain
important information regarding the Exchange Offers and the Consent
Solicitations.
None of EchoStar, DBS, DBS Issuer, any of their respective
subsidiaries or affiliates, or any of their respective officers,
boards of directors or directors, the dealer manager and
solicitation agent, the exchange agent and information agent or any
trustee is making any recommendation as to whether Eligible Holders
should tender any Existing DBS Notes in response to the Exchange
Offers or deliver any consents pursuant to the Consent
Solicitations and no one has been authorized by any of them to make
such a recommendation. Eligible Holders must make their own
decision as to whether to tender their Existing DBS Notes and
deliver consents, and, if so, the principal amount of Existing DBS
Notes as to which action is to be taken.
The Exchange Offers and the Consent Solicitations are not being
made to Eligible Holders of Existing DBS Notes in any jurisdiction
in which the making or acceptance thereof would not be in
compliance with the securities, blue sky or other laws of such
jurisdiction. In any jurisdiction in which the Exchange Offers and
the Consent Solicitations are required to be made by a licensed
broker or dealer, the Exchange Offers and the Consent Solicitations
will be deemed to be made on behalf of DBS and DBS Issuer, as
applicable, by the dealer manager and solicitation agent, or one or
more registered brokers or dealers that are licensed under the laws
of such jurisdiction.
The DBS Issuer Notes have not been and will not be registered
under the Securities Act or any state securities laws and may not
be offered or sold in the United
States, except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and applicable state securities laws. The DBS Issuer
Notes have not been and will not be qualified for sale to the
public by prospectus under applicable Canadian securities laws and,
accordingly, any issuance of DBS Issuer Notes in Canada will be made on a basis which is exempt
from the prospectus requirements of such securities laws.
This press release shall not constitute an offer to sell or
exchange or a solicitation of an offer to buy or exchange any
securities, nor shall there be any sale or exchange of the DBS
Issuer Notes in any jurisdiction where such offering or sale or
exchange would be unlawful. There shall not be any sale of the DBS
Issuer Notes in any jurisdiction in which such offer, solicitation,
exchange or sale would be unlawful prior to registration or
qualification under the securities laws of such jurisdiction.
D.F. King & Co., Inc. is acting as exchange agent and
information agent for the exchange offers and consent
solicitations.
About EchoStar Corporation
EchoStar Corporation (Nasdaq: SATS) is a premier provider of
technology, networking services, television entertainment and
connectivity, offering consumer, enterprise, operator and
government solutions worldwide under its EchoStar®, Boost Mobile®,
Boost Infinite, Sling TV, DISH TV, Hughes®, HughesNet®, HughesON™,
and JUPITER™ brands. In Europe,
EchoStar operates under its EchoStar Mobile Limited subsidiary and
in Australia, the company operates
as EchoStar Global Australia. For more information, visit
www.echostar.com and follow EchoStar on X (Twitter) and
LinkedIn.
Where You Can Find Additional Information
As noted above, further details regarding the terms and
conditions of the Offers can be found in the Exchange Offer
Memorandum. ANY INVESTOR HOLDING EXISTING DBS NOTES IS URGED TO
READ THE EXCHANGE OFFER MEMORANDUM THAT HAS BEEN MADE AVAILABLE TO
THEM BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE ISSUER
AND THE OFFERING.
Requests for the Exchange Offer Memorandum and other documents
relating to the Offers may be directed to D.F. King & Co.,
Inc., the exchange agent and information agent for the Offers, by
sending an email to DISH@dfking.com or by calling (800) 967-5084
(U.S. toll-free) or (212) 269-5550 (banks and brokers).
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,
DISH Network's and DBS's most recently filed Annual Report on Form
10-K and subsequent Quarterly Reports on Form 10-Q, and in
EchoStar's and DBS'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