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Dish DBS boosts 2-part secured offering to $5B at midpoint of talk

DISH DBS Corp. has upsized its dual-tranche offering of secured notes to $5 billion, from $4 billion, and it set pricing on the offering at 5.25% for the five-year issue, and 5.75% for the seven-year tenor, or in line with the midpoint of previous guidance ranges for both tranches, according to market sources. Joint bookrunners are Deutsche Bank, J.P. Morgan and Guggenheim. Order reconfirmations are due by 10 a.m. ET, with pricing to follow today.

Both tranches will be non-callable for life.

Proceeds will be used to make an intercompany loan to parent company DISH Network Corp. to finance the potential purchase of wireless spectrum licenses and/or for general corporate purposes, including the build-out of wireless infrastructure. The intercompany loan will be secured by the cash proceeds of the loan and interest in any wireless spectrum licenses acquired using such proceeds, according to a company statement.

Dish DBS, through its subsidiaries, provides pay-TV services under the Dish and Sling brands in the U.S. The secured bonds are rated B+/Ba3.

Moody's on Nov. 8 downgraded the corporate and unsecured debt ratings for DISH Network to B2, from B1. Concurrently, the B2 corporate rating on Dish DBS was affirmed, while the subsidiary's unsecured debt grade was lowered to B3, from B2.

Moody's said the ratings actions on the parent company were prompted by expectations "that debt and leverage will increase at DISH (stand-alone) as a result of the transaction." The affirmation of the Dish DBS Corporate rating "is due to the neutralizing effect of the intercompany loan on the impact from the new debt issuance," while the lowered unsecured debt rating "is caused by the issuance of the new secured notes, which will result in contractual subordination of the unsecured notes and potential disproportionate loss absorption relative to the new secured notes if a bankruptcy were to occur."

Meanwhile, S&P Global Ratings the same day affirmed the B- issuer credit and unsecured debt ratings for Dish DBS.

Dish DBS on May 10 placed a $1.5 billion offering of 5.125% senior unsecured notes due 2029 at par. Dish DBS's existing bond stack also includes $1 billion of 7.375% senior unsecured notes due 2028 and $2 billion of 7.75% senior unsecured notes due 2026.