Dish Sells $2 Billion of Bonds in First Offering Since 2009
Dish Network Corp. (DISH), the second-largest U.S. satellite-television provider, sold $2 billion of 10-year notes in its first bond offering since 2009 after doubling the size of the transaction.
Dish Network planned to sell about $1 billion of the securities, the Englewood, Colorado-based company said today in a statement distributed by PR Newswire. It was the largest junk bond sale since CIT Group Inc. issued $2 billion of debt on March 23, according to data compiled by Bloomberg.
The satellite provider tapped the corporate bond market after borrowing costs on U.S. junk-rated debt plunged to the lowest on record, according to Bank of America Merrill Lynch index data. The company’s shares climbed by the most since 2009 after settling all patent litigation with TiVo Inc., ending a seven-year legal dispute over video-recording technology.
The 6.75 percent notes yield 6.875 percent, or 360 basis points more than similar-maturity Treasuries, Bloomberg data show. A basis point is 0.01 percentage point.
Moody’s Investors Service ranks Dish Network Ba3, three steps below investment grade, while Standard & Poor’s rates the company an equivalent BB-. High-yield, high-risk, or junk, bonds are ranked below Baa3 by Moody’s and below BBB- by S&P.
Dish Network last sold debt in September 2009, issuing $400 million of 10-year, 7.875 percent notes, according to data compiled by Bloomberg.
Average yields on junk bonds fell to 7.28 percent on April 30, a day after reaching the lowest on record, compared with 10.24 percent when Dish Network last sold debt, Bank of America Merrill Lynch index data show.
Dish Network rose $4.75, or 19 percent, to $29.79 at 4 p.m. New York time on the Nasdaq Stock Market, its biggest one-day increase since Oct. 13, 2008.
DirecTV is the largest U.S. satellite-television provider.
To contact the reporter on this story: Tim Catts in New York at tcatts1@bloomberg.net.
To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net.
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