DISH Network Ratings Are Not Affected By Unsolicited Bid To Purchase Clearwire
NEW YORK (Standard & Poor's) Jan. 9, 2013--Standard & Poor's Ratings Services said today that its ratings and outlook on DISH Network Corp. (DISH)(BB-/Positive/--) are not immediately affected by DISH Network's unsolicited offer to purchase Clearwire Corp. (CCC/Watch Pos/--). The proposal consists of purchasing certain spectrum assets from Clearwire for $2.2 billion, entering into a commercial agreement with Clearwire, acquiring up to all of Clearwire's common stock for $3.30 per share, and providing Clearwire with network build-out financing.
We believe there are meaningful hurdles to DISH completing the transaction as proposed, including opposition by Sprint Nextel Corp. (B+/Watch Pos/--), which currently owns over 50% of Clearwire, and stipulations in its existing Equityholders' Agreement. We do not view the proposal as a clear articulation of DISH's wireless strategy, and believe it is the first step in a potentially long process that could involve further negotiations with Clearwire and possible partnerships with other operators. If the unsolicited bid results only in the sale of spectrum to DISH, we believe the company can meet this with cash on hand. As of Sept. 30, 2012, cash and short-term investments at DISH totaled approximately $6.4 billion. Pro forma for the company's $1.5 billion debt issuance and special dividend in December 2012, cash balances are closer to $7.5 billion. However, in our view, given the aforementioned obstacles to the Clearwire proposal, there is still uncertainty regarding a definite partner and future network build-out costs related to DISH's long-term wireless strategy. As a result, we could revise the rating outlook back to stable if these latest developments lead to a prolonged delay in the articulation of a clear plan by DISH regarding its wireless initiatives.
Mimi Barker, New York , email@example.com
Michael P Altberg, New York (1) 212-438-1000
Richard C Siderman, San Francisco (1) 415-371-5034
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