Exciton optical transitions in transition-metal dichalcogenides offer unique opportunities to study rich many-body physics. Recent experiments in monolayer WSe$_2$ and WS$_2$ have shown that while the low-temperature photoluminescence from neutral excitons and three-body complexes is suppressed in the presence of elevated electron densities or strong photoexcitation, new dominant peaks emerge in the low-energy side of the spectrum. I present a theory that elucidates the nature of these optical transitions showing the role of the intervalley Coulomb interaction. After deriving a compact dynamical form for the Coulomb potential, I calculate the self-energy of electrons due to their interaction with this potential. For electrons in the upper valleys of the spin-split conduction band, the self energy includes a moderate redshift due to exchange, and most importantly, a correlation-induced virtual state in the band-gap. The latter sheds light on the origin of the luminescence in monolayer WSe$_2$ and WS$_2$ in the presence of pronounced many-body interactions.
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