EchoStar Debt Soars as Spectrum Deal Seen as Game Changer

EchoStar Corp.’s mega-sale of spectrum licenses to AT&T Inc. sent some of its $25 billion of debt soaring from distressed levels, vindicating bondholders who withstood years of brinkmanship and legal drama with the wireless and pay-TV empire led by billionaire Charlie Ergen.

It’s a potential game changer for a heavily-indebted business that had a contentious relationship with its creditors. Bondholders battled through controversial asset moves and the litigation that ensued, while enduring Ergen’s skirmishes with Elon Muskand regulators and most recently stomaching skipped coupon payments and the threat of bankruptcy.

Proceeds from the $23 billion transaction will ...