Dish Network announced plans to raise another $1 billion by selling convertible notes as it inches closer to joining the wireless market.
The satellite TV provider said the notes will be unsecured obligations of Dish and will be settled in either cash, shares of Dish or a combination of the two. The interest rate and other terms will be determined between Dish and the purchasers of the notes.
“The net proceeds of the placement are intended to be used for strategic transactions, which may include wireless and spectrum-related strategic transactions, and for other general corporate purposes,” Dish said in its announcement.
Dish is a bidder in the FCC’s incentive auction of 600 MHz, which is expected to wrap up in the next few weeks. The company said in an FCC filing earlier this week that it plans to launch a narrowband IoT (NB-IoT) network to meet the FCC’s buildout requirements for the spectrum it already owns. FCC rules stipulate that the satellite-TV provider must achieve 40% signal coverage on the 700 MHz E-Block licenses it purchased in 2008 by the end of the month, or reach a 70% buildout by March 2020. And Dish faces similar mandates for its licenses in the AWS-4 band.
Dish could use the cash to help fund its network buildout, but Walter Piecyk of BTIG Research said it’s too early to jump to any conclusions about what the company may be hoping to achieve with the new funds.
“This deal would add $1 billion on top of more than $5 billion already on the balance sheet and an estimated $1.5 billion of upfront payments for the auction, so I’m not sure there are many material new conclusions to be drawn from today’s filing,” Piecyk told FierceWireless via email. “The listed uses of cash is no different than their last offering.”
Indeed, Dish said in August that it had closed a previously announced offering of $3 billion in convertible notes. The company said at the time it planned to use those funds for strategic transactions that “may include wireless and spectrum-related strategic transactions” as well.