EchoStar Announces $1.0 Billion Debt Offering

[Scott Greczkowski]

EchoStar Announces $1.0 Billion Debt OfferingENGLEWOOD, Colo.--(BUSINESS WIRE)--Jan. 19, 2006--EchoStar Communications Corporation (NASDAQ: DISH) today announced that its subsidiary, EchoStar DBS Corporation, is offering approximately $1.0 billion aggregate principal amount of debt securities in accordance with Securities and Exchange Commission Rule 144A. The proceeds of the offering are intended to be used to redeem EchoStar DBS's outstanding 9-1/8% Senior Notes due 2009 as well as for general corporate purposes.
This notice does not constitute an offer to sell, or the solicitation of an offer to buy, securities. Any offers of the securities will be made only by means of a private offering circular. The notes have not been registered under the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Except for historical information contained herein, the matters set forth in this press release are forward-looking statements. The forward-looking statements set forth above involve a number of risks and uncertainties that could cause actual results to differ materially from any such statement, including the risks and uncertainties discussed in EchoStar Communication Corporation's Disclosure Regarding Forward-Looking Statements included in its recent filings with the Securities and Exchange Commission, including its annual report on Form 10-K and its most recent quarterly report on Form 10-Q. The forward-looking statements speak only as of the date made, and EchoStar Communications Corporation expressly disclaims any obligation to update these forward-looking statements.

 

[Harry]

Wow, 9-1/8% and they are just now acting on it?

 

[rocatman]

Wow, 9-1/8% and they are just now acting on it?

When the 9-1/8% Senior Notes were issued, there may have been a minimum time period before they could be redeemed. This time period affects how attractive to the market these Senior Notes are when they were offered.

 

[SummitAdvantageRetailer]

Can someone put this in plain english? I don't know much about securities and investments alike.

 

[bxl4]

The notes are not "due" until 2009 but can (and now will) be redeemed early by choice of Echostar. Many bond/notes are "callable" like this.

It is a trade-off with the buyers. Issuers (like Echostar) want to have maximum flexibility to call the bonds whenever they want. Buyers (like bond mutual funds) want some certainty that they'll get the coupon (interest) for a long time, if not the full, as issued life of the bond. It usually boils down to a negotiated agreement at the time of the original sale.

The comment about the 144a sale of the new, replacement bonds means that they are selling these new bonds to "big boys" in a private transaction rather than on some open exchange.

 

[Allin4greeN]

The notes are not "due" until 2009 but can (and now will) be redeemed early by choice of Echostar. Many bond/notes are "callable" like this.

It is a trade-off with the buyers. Issuers (like Echostar) want to have maximum flexibility to call the bonds whenever they want. Buyers (like bond mutual funds) want some certainty that they'll get the coupon (interest) for a long time, if not the full, as issued life of the bond. It usually boils down to a negotiated agreement at the time of the original sale.

The comment about the 144a sale of the new, replacement bonds means that they are selling these new bonds to "big boys" in a private transaction rather than on some open exchange.

But the sale of these bonds, to the un-named "big boys," does not represent a sale of any portion of ownership of E*, rather it simply represents the shifting of outstanding debt (a whopping billion bucks)?? Did I get that right?

 

[bxl4]

1.0 billion bond sale

Yes that is right. This refinance has nothing to do with ownership, it is a bit like refinancing you mortgage. Different lender, lower rate.

 

[riverdog]

Does this in any way affect the stability of the organization?
Is their future in jeopardy?