Comments on the Spectrum of CHL Dyons

We address a number of puzzles relating to the proposed formulae for the degeneracies of dyons in orbifold compactifications of the heterotic string to four dimensions with $N =4$ supersymmetry. The partition function for these dyons is given in terms of Siegel modular forms associated with genus-two Riemann surfaces. We point out a subtlety in demonstrating S-duality invariance of the resulting degeneracies and give a prescription that makes the invariance manifest. We show, using M-theory lift of string webs, that the genus-two contribution captures the degeneracy only if a specific irreducibility criterion is satisfied by the charges. Otherwise, in general there can be additional contributions from higher genus Riemann surfaces. We analyze the negative discriminant states predicted by the formula. We show that even though there are no big black holes in supergravity corresponding to these states, there are multi-centered particle-like configurations with subleading entropy in agreement with the microscopic prediction and our prescription for S-duality invariance. The existence of the states is moduli dependent and we exhibit the curves of marginal stability and comment on its relation to S-duality invariance.