Dish Network 1998 Annual Report Download - page 66

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
F–19
4. Long-Term Debt
As described in Note 1, except for residual aggregate non-tendered debt of approximately $2.4 million, the 1994 Notes, 1996 Notes
and the 1997 Notes that were outstanding at December 31, 1998 were retired in connection with closing of the Tender Offers and the
concurrent sale of the Seven and Ten Year Notes. Additionally, substantially all of the restrictive covenants contained in each of the
respective indentures were removed upon closing of the Tender Offers. A brief summary of the terms of the residual notes
outstanding follows.
1994 Notes
In June 1994, Dish, Ltd. issued the 1994 Notes, which consisted of 12 7/8% Senior Secured Discount Notes
due June 1, 2004 and Common Stock Warrants (the “Warrants”) (collectively, the “1994 Notes Offering”). The 1994
Notes Offering resulted in net proceeds to Dish, Ltd. of $323 million. The 1994 Notes bear interest at a rate of 12 7/8%
computed on a semi-annual bond equivalent basis. Interest on the 1994 Notes will not be payable in cash prior to
June 1, 1999, with the 1994 Notes accreting to a principal value at stated maturity of $1,000 per bond (an aggregate of
approximately $1.5 million for the bonds not tendered) by that date. Commencing in December 1999, interest on the
1994 Notes will be payable in cash on December 1 and June 1 of each year. The remaining balance of 1994 Notes
matures on June 1, 2004.
1996 Notes
In March 1996, ESBC issued the 1996 Notes which consisted of 13 1/8% Senior Secured Discount Notes due
2004 (the “1996 Notes Offering”). The 1996 Notes Offering resulted in net proceeds to ESBC of approximately
$337 million. The 1996 Notes bear interest at a rate of 13 1/8%, computed on a semi-annual bond equivalent basis.
Interest on the 1996 Notes will not be payable in cash prior to March 15, 2000, with the 1996 Notes accreting to a
principal amount at stated maturity of $1,000 per bond (an aggregate of approximately $1.1 million for the bonds not
tendered) by that date. Commencing in September 2000, interest on the 1996 Notes will be payable in cash on
September 15 and March 15 of each year. The 1996 Notes that remain outstanding following the Tender Offers mature
on March 15, 2004.
1997 Notes
In June 1997, DBS Corp issued the 1997 Notes which consisted of 12 ½% Senior Secured Notes due 2002
(the “1997 Notes Offering”). The 1997 Notes Offering resulted in net proceeds to DBS Corp of approximately
$363 million. Interest accrues on the 1997 Notes at a rate of 12 ½% and is payable in cash semi-annually on
January 1 and July 1 of each year, commencing January 1, 1998. Approximately $109 million of the net proceeds of
the 1997 Notes Offering was placed in the Interest Escrow to fund the first five semi-annual interest payments (through
January 1, 2000). Additionally, approximately $112 million of the net proceeds of the 1997 Notes Offering was placed
in the Satellite Escrow to fund the construction, launch and insurance of EchoStar IV. The 1997 Notes that remain
outstanding following the Tender Offers mature on July 1, 2002.
Seven and Ten Year Notes
On January 25, 1999, DBS Corp sold $375 million principal amount of 9 1/4% Senior Notes due 2006 (the
Seven Year Notes) and $1.625 billion principal amount of 9 3/8% Senior Notes due 2009 (the Ten Year Notes). Interest
accrues at annual rates of 9 1/4% and 9 3/8% on the Seven Year and Ten Year Notes, respectively. Interest on the Seven
and Ten Year Notes is payable semi-annually in cash in arrears on February 1 and August 1 of each year, commencing
August 1, 1999.
Concurrently with the closing of the Notes offering, EchoStar used approximately $1.658 billion of net
proceeds received from the sale of the Notes to complete the Tender Offers for its outstanding 1994 Notes, 1996
Notes and 1997 Notes. In February 1999, EchoStar used approximately $268 million of net proceeds received
from the sale of the Notes to complete the Tender Offers related to the Senior Exchange Notes issued on January
4, 1999, in exchange for all issued and outstanding 12 1/8% Series B Senior Redeemable Exchangeable Preferred