Matt Levine, Columnist

Dish Bondholders Don’t Want a Haircut

Also UniCredit’s Commerzbank hedges and a FanDuel VIP.

October 2, 2024 at 6:58 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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We talked on Monday about the proposed merger between DirecTV and Dish Network, in which DirecTV will pay $1 for Dish and also assume its $9.75 billion of debt. Except not quite: The deal is contingent on the holders of that debt agreeing to get paid back less than $9.75 billion. Either they collectively agree to accept $1.568 billion of haircuts (that is, cut the debt to about $8.2 billion), or the deal is off. Effectively DirecTV wants to buy Dish for less than zero dollars; Dish’s bondholders have to agree to pay DirecTV $1.568 billion to take over the company.

Will they? Well, Dish’s bonds were trading at somewhat distressed levels before the deal, so they might. On the other hand, after the deal was announced, the bonds traded up above the proposed deal price, so they might not.1 Bloomberg’s Reshmi Basu and Jill R Shah report: