EchoStar Debt Reaches All-Time High as Spectrum Deal Pays Off Borrowings

EchoStar Corp.'s sale of spectrum licenses to AT&T has sent its $25 billion of debt soaring, with proceeds largely going towards paying off borrowings of Ergen's businesses. Bondholders have faced years of brinkmanship and legal drama with the wireless and pay-TV empire led by billionaire Charlie Ergen. The transaction is seen as a potential game changer for the heavily-indebted business and could help settle a lawsuit brought by bondholders.

EchoStar Corp.'s $23 billion sale of spectrum licenses to AT&T Inc. has sent the company's $25 billion of debt soaring, with proceeds largely going towards paying off borrowings of Ergen's sprawling businesses. Bondholders, who have faced years of brinkmanship and legal drama, are seeing a potential game changer for the heavily-indebted company.

The deal, announced on Tuesday, covers 50 MHz of nationwide spectrum, including 3.45 GHz and 600 MHz bands, pending regulatory approval. As part of the transaction, EchoStar and AT&T amended their network services agreement to form a hybrid mobile network operator relationship [1]. This move is part of EchoStar's ongoing efforts to resolve the Federal Communications Commission's (FCC) inquiries into its spectrum use [2].

EchoStar CEO Hamid Akhavan noted that the proceeds from the sale will help retire debt and fund future operations. The company emphasized that its other businesses, including Dish TV, Sling, and Hughes, will not be affected by the transaction [1].

The deal bolsters AT&T's spectrum portfolio, adding licenses in more than 400 U.S. markets and enhancing its low-band and mid-band spectrum holdings. AT&T CEO John Stankey stated that the acquisition will enhance customers' 5G wireless and home internet experience in more markets [1].

The transaction is seen as a significant step forward for EchoStar, which has faced regulatory scrutiny over its spectrum management. The FCC has questioned EchoStar's compliance with 5G buildout requirements after complaints from Elon Musk's SpaceX that unused spectrum should be reassigned [1]. Using the proceeds from the deal, EchoStar plans to repay a $3.5 billion Dish Network note and a $7.6 billion inter-company loan, among other debt obligations [3].

The deal has also provided a boost to EchoStar's bondholders, with the company's bonds seeing substantial gains in the high yield secondary market. For instance, Hughes Satellite Systems Corp.'s 6.625% 2026 notes rose as much as 21 cents on the dollar, and Dish's 5.125% 2029 bonds jumped as much as 11.625 cents [3].

The cash influx could ultimately help settle a lawsuit brought by bondholders after Ergen moved Dish's crown-jewel wireless spectrum licenses out of their reach. The deal also eases some overhang from a fight with the FCC and its chairman Brendan Carr over EchoStar's management of its spectrum rights [3].

EchoStar's sale of spectrum licenses to AT&T is a notable development in the company's ongoing efforts to manage its debt and regulatory compliance. The transaction underscores the importance of strategic asset management and regulatory compliance in the telecommunications industry.

References:
[1] https://www.newsmax.com/newsfront/echo-star-spectrum-at-t/2025/08/26/id/1223949/
[2] https://www.hollywoodreporter.com/business/business-news/echostar-att-spectrum-licenses-sale-fcc-inquiries-1236353609/
[3] https://www.bloomberg.com/news/articles/2025-08-26/echostar-debt-soars-as-spectrum-deal-seen-as-game-changer-sats-t