DISH Network greenshoe increases 3.375% convertibles to $3 billion

By Angela McDaniels

Tacoma, Wash., Aug. 8 – DISH Network Corp. said the $500 million over-allotment option for its 3.375% 10-year convertible notes was exercised in full, increasing the size of the issue to $3 billion from $2.5 billion.

As previously reported, the issuer priced the convertibles on Aug. 2 at par with an initial conversion premium of 32.5%.

Initial price talk was for a yield of 3.125% to 3.625% and an initial conversion premium of 30% to 35%, according to a market source.

Deutsche Bank Securities Inc. is the bookrunner.

Conversions will settle in cash, class A common stock or a combination thereof.

The issue is non-callable for life. There is dividend and cash takeover protection.

Proceeds will be used for strategic transactions, which may include wireless and spectrum-related strategic transactions, and for other general corporate purposes.

The Englewood, Colo.-based company has entered into a convertible note hedge transaction with four financial institutions, including an affiliate of the initial purchaser of the notes. For DISH, the transactions effectively raise the conversion premium to about 75%.

DISH also entered into a warrant transaction with each option counterparty. The warrants have an initial strike price of $86.0825 per share, a premium of about 75% over Aug. 2 closing share price.

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