EchoStar has paid down $1.8 billion (€1.5bn) in debts owned to various creditors. The payments settle 82 per cent of the debts incurred by EchoStar and its Dish direct-to-home pay-TV operation. More than 96 per cent of stakeholders supported the plan.

As a result, DISH DBS now faces no long-term debt maturities until July this year, reducing financial risk in the very near term. EchoStar shares responded well, and are near their 52-week high. On March 18th, the stock closed at $107.75, up 38.2 per cent from the previous year although 22.7 per cent below its peak of $132.25. The muted stock movement around the restructuring suggests the market had already factored in the debt relief.

The refinancing process was straightforward: EchoStar – in essence – swapped new debt for old, maturing notes. The settlement involved issuing about $2.3 billion in 6.75 per cent Senior Spectrum Secured Exchange Notes and $1.9 billion in 3.875 per cent Convertible Senior Spectrum Secured Notes, both due in 2030. These notes are secured by EchoStar’s AWS-3 and AWS-4 spectrum holdings, highlighting the strategic importance of these assets in supporting the company’s nationwide wireless expansion.

The payment means that some of the various legal actions against EchoStar are now cancelled.

Meanwhile, the restructuring is another step forward in the change from a pure satellite operator to a capital management business. The shift for EchoStar is helped hugely by the increased value in EchoStar’s spectrum holdings and the agreement it struck with SpaceX last year. The deal sees EchoStar receiving around $8.5 billion in cash, over $11 billion in SpaceX equity (representing about 2 percent ownership in SpaceX), and SpaceX will take on $2 billion in interest payments due through late 2027. This arrangement not only unlocks the value of EchoStar’s spectrum holdings but also secures a long-term stake in a high-growth aerospace company.

EchoStar has been removed from Standard & Poor’s 400 Communication Services listing and slips into S&P’s 500.

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Categories: Blogs, Business, Inside Satellite

Tags: dish, Echostar