Dish Closes $3B Notes Offering

Says proceeds could be used for spectrum buys

Dish Network said it has closed a $3 billion offering of convertible notes, proceeds of which could be used to purchase wireless spectrum.

Dish had previously announced the offering of 3.375% convertible notes due in 2026 at about $2 billion with the initial purchaser of the notes granted an option to purchase an additional $400 million in notes. That about was later increased to $2.5 billion in notes with an option to purchase an additional $500 million.

 The net proceeds of $2.723 billion – before offering expenses – are “intended to be used for strategic transactions, which may include wireless and spectrum related strategic transactions” and for general corporate purposes,” Dish said in a statement.

Also as previously reported, Dish said that in connection with the pricing of the notes, it has entered into convertible note hedge transactions with four financial institutions, including an affiliate of the initial purchaser of the notes, that are expected to reduce potential dilution to holders of Dish stock attributable to any conversion of the notes and offset any cash payments Dish is required to make in excess of the principal amount of converted notes.

Dish has been named as a potential bidder in the upcoming federal spectrum auctions. The satellite TV pioneer currently holds about 80 MHz of wireless spectrum, which some analysts value at as much as $20 billion. Last week the satellite TV service rpovider aslo announced a skinny bundle video package, offering up to 50 channels (minus broadcast networks and ESPN) for $39.99 per month.