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Bond Market News
Dish Creditors Push For Reduced Haircut Threatens $23bn Merger with DirecTV
October 23, 2024
TPG, which controls DirecTV, recently agreed to acquire Dish Network for a nominal $1, and offered Dish’s bondholders to exchange their $10bn in existing notes for $8bn in new bonds. According to FT, Dish creditors have pushed DirecTV to narrow the discount from $1.6bn to about $300mn, but the bidder has refused to change its terms. This deadlock threatens the $23bn merger, as two-thirds of bondholders must agree for the deal to proceed by the October 29 deadline. If the exchange fails, DirecTV can terminate the contract by November 9. Despite the ongoing negotiations, TPG has confirmed it will still provide a $2.5bn loan to Dish, independent of the merger’s outcome. The situation is further complicated by EchoStar, Dish’s parent company, which is dealing with nearly $22bn in debt and potential bankruptcy. EchoStar is currently undergoing a complex restructuring plan that involves various debt exchanges and a planned merger with Dish. DirecTV hopes that the merged entity, with a total of 18mn subscribers, will compete better with major streaming platforms.
Dish’s bonds traded stable with its 5.25% 2026s at 92.5, yielding 9.25%.
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