Dish Network Corporation -- Moody's says DISH's ratings remain on review for downgrade despite Sprint merger less likely

New York, June 19, 2013 -- Moody's Investors Service said that DISH Network Corporation's (DISH) wholly owned subsidiary, DISH DBS Corporation's ("DISH DBS") Ba3 Corporate Family Rating (CFR) and related debt instrument ratings remain on review for possible downgrade, following the company's announced update on its proposal to merge with Sprint Nextel Corporation ("Sprint"; B1 CFR, under review). As DISH management has stated in a filing that "Sprint prematurely terminated our due diligence process and accepted extreme deal protections", and such revisions "made it impracticable for DISH to submit a revised offer by the June 18th deadline imposed by Sprint", we believe that while DISH could still play the spoiler and resurface with another bid, at this juncture, DISH appears to have pulled back from pursuing a merger with Sprint. As the likelihood of such a transaction diminishes from when we first put the company on review for downgrade in April 2013, this could lessen the severity of downward rating pressure on the company. However, the review will consider what other strategies DISH may pursue to develop a wireless broadband product, such as making a bid for another wireless company. It will also consider how successful DISH will be in its continued pursuit of a material stake in and a wireless partnership with Clearwire Communications LLC ("Clearwire"; Caa2 CFR on review for possible upgrade), and if successful, what the company may need to contribute to a potential joint venture in terms of additional spectrum or capital.

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