Long-Term Debt

6 Months Ended

Jun. 30, 2011

Long-Term Debt

Long-Term Debt

6.     Long-Term Debt

6 3/4% Senior Notes due 2021

On May 5, 2011, we issued $2.0 billion aggregate principal amount of our ten-year, 6 3/4% Senior Notes due June 1, 2021 at an issue price of 99.093%.  Interest accrues at an annual rate of 6 3/4% and is payable semi-annually in cash, in arrears on June 1 and December 1 of each year, commencing on December 1, 2011.

The 6 3/4% Senior Notes are redeemable, in whole or in part, at any time at a redemption price equal to 100% of the principal amount plus a “make-whole” premium, as defined in the related indenture, together with accrued and unpaid interest.  Prior to June 1, 2014, we may also redeem up to 35% of each of the 6 3/4% Senior Notes at specified premiums with the net cash proceeds from certain equity offerings or capital contributions.

The 6 3/4% Senior Notes are:

· general unsecured senior obligations of DDBS;

· ranked equally in right of payment with all of DDBS’ and the guarantors’ existing and future unsecured senior debt; and

· ranked effectively junior to our and the guarantors’ current and future secured senior indebtedness up to the value of the collateral securing such indebtedness.

The indenture related to the 6 3/4% Senior Notes contains restrictive covenants that, among other things, impose limitations on the ability of DDBS and its restricted subsidiaries to:

· incur additional debt;

· pay dividends or make distributions on DDBS’ capital stock or repurchase DDBS’ capital stock;

· make certain investments;

· create liens or enter into sale and leaseback transactions;

· enter into transactions with affiliates;

· merge or consolidate with another company; and

· transfer or sell assets.

In the event of a change of control, as defined in the related indenture, we would be required to make an offer to repurchase all or any part of a holder’s 6 3/4% Senior Notes at a purchase price equal to 101% of the aggregate principal amount thereof, together with accrued and unpaid interest thereon, to the date of repurchase.

Fair Value of our Long-Term Debt

The following table summarizes the carrying and fair values of our debt facilities as of June 30, 2011 and December 31, 2010:

	As of
	June 30, 2011				December 31, 2010
	Carrying				Carrying
	Value		Fair Value		Value		Fair Value
	(In thousands)
6 3/8% Senior Notes due 2011 (1)	$	1,000,000	$	1,010,000	$	1,000,000	$	1,032,500
7 % Senior Notes due 2013	500,000		538,750		500,000		532,815
6 5/8% Senior Notes due 2014	1,000,000		1,062,500		1,000,000		1,032,500
7 3/4% Senior Notes due 2015	750,000		813,750		750,000		798,750
7 1/8% Senior Notes due 2016	1,500,000		1,595,625		1,500,000		1,548,600
7 7/8% Senior Notes due 2019	1,400,000		1,519,000		1,400,000		1,463,000
6 3/4% Senior Notes due 2021	2,000,000		2,012,140		—		—
Mortgages and other notes payable	75,072		75,072		77,965		77,965
Subtotal	$	8,225,072	$	8,626,837	$	6,227,965	$	6,486,130
Capital lease obligations (2)	276,341		NA		286,971		NA
Total long-term debt and capital lease obligations (including current portion)	$	8,501,413			$	6,514,936

(1)           Our 6 3/8% Senior Notes with an aggregate principal balance of $1.0 billion mature on October 1, 2011.

(2)           Disclosure regarding fair value of capital leases is not required.