DBSD granted interim OK to sell $31.2 million auction-rate securities

By Jennifer Lanning Drey

Portland, Ore., June 15 - DBSD North America, Inc. obtained interim court approval to sell $31.2 million in student loan-backed auction-rate securities for cash, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The final hearing is scheduled for the earlier of July 14 or the disclosure statement hearing.

The interim approval allows the company to sell securities in one or more transactions resulting in a total of no more than $5 million of net proceeds.

As previously reported, the company bought the securities during the first quarter of 2008 using the proceeds from the sale and maturity of its investments, as well as cash and cash equivalents.

The securities consist of variable-rate bonds with maturities ranging from 24 to 39 years.

Some of the securities purchased by DBSD in 2008 are covered under an agreement under which the company can require UBS to repurchase them at par value from June 30, 2010 to July 2, 2012.

The company is looking to sell the securities not covered under the UBS agreement.

The sale proceeds will be used to maintain the company's going-concern value while it finalizes a plan of reorganization.

DBSD is a subsidiary of ICO Global Communications (Holdings) Ltd., a Reston, Va., mobile satellite services company. The subsidiary filed for bankruptcy on May 15. Its Chapter 11 case number is 09-13061.

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