Dish Network wants to go shopping, and it needs to raise some cash before it can ring up some purchases.
In an announcement made Friday morning (3/10), the DBS service provider plans to issue and sell some $1 billion aggregate principal amount of 2.375% Convertible Notes due 2024 in a private offering.
The net proceeds of the placement are intended to be used “strategic transactions, which may include wireless and spectrum-related strategic transactions,” and for other general corporate purposes, the Englewood, Colo.-based company says.
The notes will be unsecured obligations of Dish Network. Upon any conversion, Dish will settle its conversion obligation in cash, shares of its Class A Common Stock, or a combination of cash and shares.
The interest rate, the initial conversion rate, and other terms and conditions of the notes will be determined by negotiations between Dish Network and note purchasers.
The notes will only be offered and sold to institutional accredited investors that are also qualified institutional buyers on a private placement basis.
The notes and shares of Dish’s Class A Common Stock issuable upon the conversion of the notes, if any, have not been and are not intended to be registered under the Securities Act or the securities laws of any other jurisdiction.
The notes may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
The issue and sale of the Notes is expected to close on March 17, 2017 subject to customary conditions.
In an updated announcement made prior to the Opening Bell on Monday (3/13), Dish said the notes will mature on March 15, 2024. Interest on the notes will be paid on March 15 and September 15 of each year, commencing on September 15, 2017.
Investors seem disappointed with the move by Dish. In early trading on Monday, DISH shares were down 40 cents, to $61.69.
The sale of the convertible notes comes as Dish and Hearst Television are embroiled in a bitter dispute over retransmission fee rates that has seen Hearst stations across the U.S. go dark on Dish — with no immediate truce in sight.