EchoStar's Strategic Moves: From Spectrum Transfer to Merger Exploration

Dish Network Corp. bonds plunged after the company transferred valuable spectrum licenses into new subsidiaries, raising concerns among holders of its $20 billion debt. The move, which also involved freeing a unit holding 3 million television subscribers from debt covenants, is often seen as a precursor to money-raising deals that can weaken existing creditors' claims to collateral. This maneuver caused more of Dish's debt to fall into distressed levels, with $11.9 billion of its bonds trading at over 10 percentage points above Treasuries. Dish's merger with EchoStar earlier this year is part of its pivot from satellite television to wireless service.