EchoStar is reportedly working to secure more than $1 billion in desperately needed financing to help the communications provider’s Dish Network subsidiary, which is floundering under a heavy debt load and waning financial results.

Bloomberg is reporting that Dish Network has received at least one financing proposal valued at more than $1 billion, with collateral on that financing tied to Dish Network’s extensive spectrum portfolio.

Dish Network is reportedly sitting on $20 billion in debt and posted distressing operational and financial results for its most recent operating quarter. The Bloomberg report cited Bloomberg Intelligence senior credit analyst Stephen Flynn who noted in a recent report that “EchoStar’s debt load of almost $22 billion is likely untenable, and the company could pursue maneuvers to improve liquidity and extend its maturity profile.”

EchoStar ended its most recent quarter with $2.4 billion in cash and marketable securities, which it planned to use pay $1 billion in notes that were due in March. It has another $2 billion in bond securities due in November and $9 billion more due in 2026.

However, it’s not currently generating enough cash flow from operations to help fund that $2 billion in bonds due later this year, thus the current financial scrambling.

EchoStar CFO Paul Orban noted during the company’s most recent earnings call that it was “in active discussions with numerous parties to secure committed financing to meet our future obligations and have received significant inbound interest from reputable counterparties looking to provide such financing in various forms and had various positions in our capital structure, all of which we are carefully evaluating.”

EchoStar’s ability to use spectrum as unsecured collateral is tied to a license transfer it pulled off earlier this year with Dish Network. That move had Dish Network transfer a bushel of its licenses to a newly formed EchoStar Wireless Holdings entity, which is a wholly owned subsidiary of EchoStar. The license transfer includes spectrum ranging from 1.9 GHz up to 47 GHz, with Dish Network retaining direct control over most of the spectrum it’s using to power its 5G network.

However, Gimmie Credit financial analyst Dave Novosel told SDxCentral in an interview that the use of those spectrum licenses to secure financing could be challenging. Novosel explained that while spectrum “is valuable in the sense that like land they are not making more of it,” the value is tied to what someone is willing to pay for it.

“Anybody investing in these bonds would have to be prepared to take this spectrum as a guarantee of collateral,” Novosel said. “Certainly Verizon, AT&T and T-Mobile would welcome more spectrum … but none of these three are desperate for spectrum. So there's a question of how valuable the spectrum might be.”

Novosel also pointed to regulatory strings that could be tied to that spectrum due to the Federal Communications Commission’s (FCC) involvement with transferring licenses to Dish Network as part of its approval of T-Mobile US’ acquisition of Sprint.

“The whole idea with the Sprint-T-Mobile deal going through was that Dish would become a viable fourth competitor in the market, and at this point they’re not,” Novosel said. “The FCC would have some say as to where that spectrum might go, so you have some legal entanglements possibly, which complicates the fundraising.”

The financial juggling comes just months after EchoStar closed on its “acquisition” of Dish Network, both of which function under financial Svengali Charlie Ergen. That transaction was supposed to stabilize Dish Network and EchoStar’s financial posture by using EchoStar’s near-term liquidity to pay for Dish Network’s near-term financial needs.

Novosel said those needs are now on the clock, with immediacy dependent on which side of the table you are sitting on.

“A lot of people would say, ‘well, there's not much time as these bonds are due in November,’ where Ergen might say ‘look we’ve got seven months, we’ve got a lot of time,’ and both perspectives have some merit,” Novosel said. “But I think Ergen is the kind of a guy, given his background, he's kind of a gambler, I think here he's willing to wait it out. He doesn’t get nervous typically, and is not going to make a rash decision so they can wait it out.”