Morning Commentary: DISH Network convertible notes in focus in early trading

By Abigail W. Adams

Portland, Me., April 24 – The convertibles secondary space was off to a slow start on Monday with few names on the tape as broader markets remained indecisive.

Equity indexes were again either side of unchanged early in the session following last week’s largely sideways price movement.

The Dow Jones industrial average was up 9 points, or 0.03%, the S&P 500 index was down 0.11%, the Nasdaq Composite index was down 0.53% and the Russell 2000 index was up 0.34% shortly before 11 a.m. ET.

There was $42 million in reported volume about one hour into the session with few names seeing concentrated trading activity.

DISH Network Corp. was the exception with all three tranches of convertible notes (B3/CCC) active early in the session.

DISH’s soon-to-mature 2.375% convertible notes due March 15, 2024 were the most actively traded issue in the secondary space.

The notes were slightly stronger in active trade although they remained on an 86-handle.

The notes were wrapped around 86.5 early in the session with the yield about 19.7%, according to a market source.

There was $5 million in reported volume.

DISH’s 3.375% convertible notes due 2026 remained wrapped around 49 with the yield 28%.

There was $3 million in reported volume.

DISH’s 0% convertible notes due 2025 were also largely unchanged at 50 with the yield about 27.875%.

DISH’s stock was changing hands at $7.58, a decrease of 0.06%, shortly before 11 a.m. ET.

The satellite broadcaster’s capital structure has been under pressure since late February when it announced a ransomware attack that resulted in weeks-long service outages.

The attack is expected to result in a substantial loss of subscribers, which will weigh heavily on the company’s earnings, which are scheduled for release in early May.

The company has a heavy debt load, and market players have begun to question the its ability to address its looming maturities.

The 2.375% convertible notes are the first in its debt stack to come due, sources said.

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