Institutional investors will have the opportunity to purchase $1 billion worth of stock as DISH Network is looking to offer the senior notes as a way to raise funds for what are believed to be “general corporate purposes”. With DISH set to complete its purchase of Boost Mobile on July 1st, the timing to raise these funds couldn’t be more opportune. In addition to the $1.4 billion needed to complete the acquisition of Boost Mobile, DISH will need to raise funding to invest further into its wireless undertaking for building out its 5G network across the country. One of the contingencies attached to the purchase of Boost Mobile from Sprint as part of T-Mobile and Sprint’s merger is that the government is requiring DISH to cover 70% of the United States with its network by mid-2023. The company will look to gain momentum in a market plagued by supply chain issues, stifled revenues, and worker issues involving the COVID-19 pandemic.
Helping with all of this is Sprint’s parent company, SoftBank, who according to New Street Research analyst Jonathan Chaplin has “committed to guaranteeing the $1 billion debt offering from Dish for the acquisition of Boost.” Thanks to a court case in December 2019, in addition to uncovering the fact that DISH may be working with a mystery partner, we also learned that SoftBank assisted DISH in securing better financial terms including favorable interest rates by backstopping the deal.
The moves seem to be benefiting everyone involved so far, but it should be noted that the $1 billion debt could be completely unrelated to the Boost acquisition. Still, with this move and the possibility that DISH could receive a $400 million credit for its part in loaning T-Mobile its 600 MHz for free, the company has a chance to complete its Boost purchase without spending any case. DISH lent T-Mobile its 600 MHz spectrum to help them overcome challenges presented during the COVID-19 pandemic early on. The deal is set to end at the end of June, however, unless the parties figure out new terms for a deal going forward. Either way, there is speculation that Charlie Ergen, the Chairman of DISH Network, will look to secure a deal that will pay the company $400 million upfront rather than a multi-year deal with payments every year as spectrum is rented.
Source: Fierce Wireless