S&P gives Hughes Network Systems loan B-

Standard & Poor's said it assigned its B- rating to Hughes Network Systems LLC's proposed $115 million senior unsecured term loan due 2014.

Simultaneously, the outlook on the company was revised to negative from stable due to the further delay in the launch of Spaceway 3 to early 2008 which will defer anticipated EBITDA improvement, S&P said.

The corporate credit rating is affirmed at B as are the BB- bank loan rating and 1 recovery rating on the company's $50 million senior secured revolving credit facility, the agency noted, adding that the senior unsecured term loan rating of B- is based on preliminary documentation subject to receipt of final information.

Proceeds from the senior unsecured term loan will be used for general corporate purposes, including constructing or acquiring additional satellites or financing merger and acquisition opportunities, the agency said.

According to S&P, the ratings reflect mature revenue prospects for the company's core enterprise services and also reflect uncertain long-term growth prospects for small business and consumer applications, potential operating and financial risks from the launch of and uncertain business prospects for Spaceway 3 and a highly leveraged financial profile with no expectations of positive discretionary cash flow generation until 2009.

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