EchoStar to price $700 million seven-year notes to price mid-week

By Paul A. Harris

St. Louis, Mo., Dec. 14 - EchoStar DBS Corp. is expected to price $700 million of seven-year senior notes (B1/B+ existing) on Dec. 19 or 20, market sources told Prospect News Friday.

Deutsche Banc Alex. Brown and Credit Suisse First Boston will run the books, with Lehman Brothers and UBS Warburg as co-leads, sources said.

Proceeds from the Rule 144A offering will be used to partially fund the acquisition of Hughes Electronics Corp. from General Motors Corp. If the merger is not completed, proceeds will be used to fund the acquisition of Hughes' 81% stake in PanAmSat Corp. In addition, EchoStar may use proceeds for construction, launch and insurance of additional satellites, for strategic investments and acquisitions and for other general corporate purposes.

The notes will be non-callable for four years.

The Littleton, Colorado-based direct broadcast satellite TV company was scheduled to take its deal on the road Friday, according to sources, who added that pricing is expected late Dec. 19, or on Dec. 20.

In addition to the bond offering, EchoStar and Vivendi announced a new strategic alliance on Friday. Vivendi will make a $1.5 billion equity infusion into EchoStar in the form of a new class of series D preferred stock, which will be convertible into Class A shares, and is equivalent to approximately 10% of EchoStar or just less than 5% of EchoStar-Hughes following the merger.

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