Sinclair Broadcast Group’s failure to secure carriage of its regional sports networks as part of its broader retransmission consent deal with Dish Network sent bonds for Diamond Sports Group, the subsidiary that holds the RSNs, tumbling on Monday.

According to Bloomberg Law, Diamond Sports Group’s 5.375% bonds due in 2026 dipped 4.5 cents on the dollar to 52.75 cents, and its 6.625% high-yield notes due 2027 fell 6 cents to 27.25 cents on the dollar. Back on Nov. 3, Wells Fargo Securities media analyst Steven Cahall wrote in a research note that the Diamond Sports Group unsecured bonds were priced at about 26 cents on the dollar.  

The bond pricing is critical because it reflects the sentiment of Diamond Sports Group debtholders, who are being asked to restructure about $8 billion in debt tied to the RSNs, as well as pump another $500 million to $600 million in cash to help finance the unit’s planned direct-to-consumer RSN offering slated for next year. 

Earlier on Monday, Sinclair said it had reached a long-term retransmission consent agreement with Dish for its 144 broadcast TV stations and Tennis Channel. While that deal helped lift Sinclair stock up nearly 3% (68 cents each) to $26.87 per share on Monday, the lack of RSN carriage seemed to spook bondholders yet again.  

Also: Does Sinclair Plan on Taking Bally Sports RSNs Direct-To-Consumer Via ATSC 3.0 Broadcast 

Sinclair had been counting on the Dish agreement to include the RSNs -- in earlier filings the broadcaster had appeared to include revenue from Dish as a portion of its overall projections for the linear networks.   

On Nov. 8, Sinclair said it had purchased Diamond’s existing accounts receivable securitization agreement from lenders and agents for about $184.4 million, a move that he wrote could be a cause for some concern for investors if it meant that the broadcaster could assume more responsibility for Diamond’s debt. One of the few bright spots for the RSNs is that their debt was held separately from Sinclair.  

“To say that SBG will become the back-stop of Diamond's bonds/debt is certainly a bridge too far at this point, but the initial reaction to this announcement is one of worry,” Cahall wrote on Nov. 8.

Some analysts had hoped that Sinclair could use the leverage of the broadcast stations to secure carriage of the sports channels, but that was not to be. With the Major League Baseball season finished and NBA basketball underway, there is little incentive for Dish to make a deal for the RSNs this year. That leaves investors to wait until March, when Sinclair’s carriage deal with Charter Communications is set to expire. ■

AT&T has again tapped the bond market, this time for $12.5 billion, to help it pare down debt as the economic uncertainty surrounding the COVID-19 pandemic rages.

According to documents filed Friday with the Securities and Exchange Commission, AT&T will commence the bond offer in five tranches -- $2.5 billion in notes due 2027; $3 billion in notes due 2031; $2.5 billion in notes due 2041; $3 billion in notes due 2051 and $1.5 billion in notes due 2060 at interest rates ranging from 2.3% to 3.85%. Proceeds from the bond offerings will go toward paring down higher interest bond debt that is slated to come due in 2020, 2021 and 2047.

This is the third time this year AT&T has tapped the debt markets. It launched a €3 billion ($3.2 billion) bond offering earlier in May for general corporate purposes, including debt retirement and in April said it had arranged a $5.5 billion credit agreement with a consortium of banks led by Bank of America.

AT&T and other media companies have used access to the debt markets to provide liquidity during the COVID-19 pandemic. Earlier this week, Comcast issued about $4 billion in bonds to refinance debt, and Discovery Inc. said it closed early on a cash tender offer for about $1.5 billion in old bonds. 

Charter Communications moved a step closer to completing its purchase of Time Warner Cable and Bright House Networks, announcing it will issue debt in a six-part deal aimed at partially financing the transactions.

According to Charter,  its subsidiary CCO Safari LLC will issue senior notes due in 2020, 2022, 2025, 2035, 2045 and 2055. Charter said in a statement that proceeds from the offering will be placed in escrow at CCP Safari II LLC until the closing of the TWC transaction, at which time the notes will be assumed by other Charter subsidiaries – Charter Communications Operating LLC and Charter Communications Operating Capital Corp.

Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and UBS Securities LLC will act as the joint book-running managers for the offering.

Charter said in May that it had agreed to purchase Time Warner Cable in a deal valued at $78.7 billion and in a separate transaction would acquire Bright House for $10.4 billion.

According to reports, the six-part bond deal could be worth between $12 billion and $15 billion when it prices later in the day. The offering is part of an overall $31 billion M&A funding package that will also include high-yield bonds and bank debt.   

The deals still need to receive regulatory approval before they can officially close. On July 8, the Federal Communications Commission picked the team that will vet the merger for the agency.