Merger could be terminated November 22nd

Never understood how companies can operate with a lot of debt.

One reason companies carry debt — even big, profitable ones like Alphabet — is that they’re trying to time the bond market, said Matteo Arena, a finance professor at Marquette University.

Between 2014 and 2020, the U.S. generally had very low interest rates, making borrowing attractive, he explained. If companies waited to borrow later, they’d have to risk paying higher interest rates, which many did in 2022.

In 2020, Alphabet was able to sell $10 billion of bonds at record-low borrowing costs, The Financial Times reported.

Arena said companies like Alphabet and Apple also have very high credit ratings because of their cash balances and robust profits. So they get lower interest rates than many other companies would.

Some corporations, like the Walt Disney Co. and Coca-Cola, have even issued 100-year bonds at certain points in their history to lock in low rates, said Mai Iskander-Datta, a finance professor at Wayne State University.

There are other advantages to carrying debt. If companies need cash and are paying interest on their debt, that interest is tax-deductible, said David Smith, the Virginia Bankers Association professor of commerce at the University of Virginia.

“That helps reduce their tax burden,” he said.
 
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I think you meant to say the bondholders are secured and the stockholders unsecured.
Nope-

Yes, bondholders are unsecured creditors:

Explanation
Bondholders are creditors of the entity that issues the bond, and they hold unsecured corporate debt. Unsecured bonds, also known as full faith and credit bonds, are not backed by collateral.

 
Not anymore... their primary network is DISH 5G, and they are weaning off of T Mobile and AT&T.
the dish network is still in it's infancy. from reviews of people using it it sucks the handoffs from tower to tower don't always happen and the phone goes dead. they could have put lte in there phones for a backup solution. i guess el chepo charlie don't want to pay the roaming fee's if any depending on the contract
 
I believe the bondholders will get paid before the past due office supplies bills. Or the landscapers or the cleaners or the UPS bill.

There is a name for that- I just don’t remember. Retired too long, I guess.
 
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DirecTV scrapping DISH merger
"As mentioned on our recent earnings call, we have a more robust foundation to operate and grow EchoStar’s business, independent of the exchange outcome," Wietecha said. "EchoStar received $2.5 billion in financing in September to pay its upcoming debt maturity, and raised an additional $5.6 billion in financing as part of a series of financial transactions recently announced. These funds are unaffected by the DIRECTV transaction."
So it appears that neither the debt payment or the extra financing were a part of the DIRECTV deal. Or TPG may have financed it but not as part of the deal. In that case it would just be a loan that has to be paid back.
 
DirecTV scrapping DISH merger

So it appears that neither the debt payment or the extra financing were a part of the DIRECTV deal. Or TPG may have financed it but not as part of the deal. In that case it would just be a loan that has to be paid back.
That what I always thought it was, have no idea why Harshness thought it was a non-refundable deposit.

Anyone that knows a little about how business is run, would never believe TPG just give away $2B like that.
 
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So, it looks like Dish Network made their debt payment with a loan from TPG and not DTV?
Well it says “"EchoStar received $2.5 billion in financing in September to pay its upcoming debt maturity” and then says “These funds are unaffected by the DIRECTV transaction”.

Other articles says “private equity firm TPG Angelo Gordon and certain co-investors provided $2.5 billion in financing to allow Dish to meet its debt maturity in November”. So not technically a loan by TPG but a loan by “Angelo Gordon and certain co-investors”.

“Financing” means it was a loan.
 
No, Dish only received the $2 Billion towards this year’s debt that was due.

They also received $5B that was raised selling more bonds, that will largely handle next year’s debt payment, I do not believe that have a large amount due in 2026.

So basically, if the sale does not happen, Echostar is basically safe for the next couple of years.

But this is just regarding their debt, they still have problems, like declining revenue, loss of TV/Phone/Hughes subscribers.

They really need to figure out how to monetize the 5G Spectrum, but in doing so, will also increase the expenses, because they will largely be starting up a new business venture.

For example, if they offer 5G Internet at home, they will need to design and build modems that will receive the signal, those type of expenses.
Bruce I am not talking about that you are pointing out. I am talking about the original two-step deal that had TPG to taking the $9.75 billion in pre-existing DISH debt and for TPG to pay $1 to Echostar as well for the video businesses. What happens to that pre-existing debt that Charlie already had ? Stays on the books at Echostar and does the DBS video business also go back to Echostar if the deal is cancelled? Those two questions is what I am asking. Can you answer only those two questions.
 
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TPG provided $2.5 billion in financing to EchoStar to help refinance Dish's debt maturity in November 2024, but EchoStar is selling Dish Network to DirecTV for $1 and $9.75 billion in debt:
  • Financing
    TPG Angelo Gordon and co-investors provided $2.5 billion in financing to help Dish refinance its debt maturity in November 2024. This financing was intended to provide interim liquidity and ensure Dish could continue to operate while the transaction with DirecTV was finalized.
  • Acquisition
    DirecTV is acquiring Dish Network and Sling TV from EchoStar in exchange for taking on $9.75 billion of Dish's debt. The deal is expected to close in the fourth quarter of 2025, subject to regulatory approval and other conditions.
What is not clear is what happens to the $2.5 billion if the deal doesn't go through but since it states that "TPG Angelo Gordon and co-investors provided $2.5 billion in financing to help Dish refinance its debt maturity in November 2024" which means it was a loan. That would mean that DISH will be paying TPG back that $2.5 billion and Dish would still have the debt that they have now.
So the $9.75 billion stays with Echostar - since the deal will be cancelled and the video business will also stay with Echostar. As for the $2.5 billion loan, I knew about that, I am talking about the original two-step deal that started this merger.
 
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Looks like It’s official Directv Buying Dish

DIRECTV Announces Termination of Agreement

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