Moody's says that DISH Network's agreement return wireless spectrum to FCC eliminates near term pressure on credit metrics, but uncertainty remains

New York, October 02, 2015 -- Moody's says that the agreement struck between DISH Network Corporation ("DISH") (subsidiary issuer DISH DBS Corporation - Ba3 CFR, negative outlook) and the FCC removes a substantial near term negative credit catalyst. However, as part of the agreement, the company still retains the risk that when the returned spectrum is re-auctioned by the FCC, if the FCC realizes less than the amounts originally bid buy Northstar Wireless and SNR Wireless, DISH will be required to fund the deficiency between the new bids and the original winning bids. This leaves a potential indemnification overhang on the credit, depending on how it is financed and funded, though it is likely to be significantly less than the approximate $3 billion liability owed for the loss of the discount. We note, however, that Dish retains the right to bid again and could end up as the winning bidder for the spectrum in the new auction.

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