Moody’s slashes Hughes Satellite

Moody's Investors Service said it downgraded Hughes Satellite Systems Corp.'s corporate family rating to Caa1 from Ba3, probability of default rating to Caa1-PD from Ba3-PD, senior secured notes rating to B2 from Ba1, and senior unsecured notes rating to Caa2 from B2. Moody's also lowered Hughes' speculative grade liquidity rating to SGL-4 from SGL-1. Previously, the ratings were being reviewed for downgrade. The outlook is now negative.

This rating action concludes the review for downgrade started on Aug. 9, following Hughes' parent, EchoStar Corp.'s announced merger with Dish Network Corp. EchoStar closed the merger with Dish on Dec. 31.

"The ratings downgrade, lowering of the SGL and outlook change consider that consolidated debt/EBITDA exceeds 8x while the combined company has limited access to the debt market to address meaningful debt maturities at Dish, which raises the risk of default," said Peter Adu, a Moody's vice president and senior credit officer, in a press release.

The outlook mirrors the lack of clarity on any forward strategy and the elevated risk of executing the merger, the agency said.

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