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Moody's rates Hughes Network notes B1, loan Ba3
Moody's Investors Service said it assigned a B1 rating to Hughes Network Systems' proposed $325 million senior unsecured notes due 2013 and a Ba3 rating to the company's proposed $50 million revolving credit facility.
This transaction coincides with the acquisition of 50% of Hughes Network Systems by SkyTerra Communications, which is 63% owned by Apollo Management.
Proceeds from the note issue will be used largely to finance the acquisition and complete the company's Spaceway 3 satellite.
Moody's said the ratings broadly reflect Hughes Network's increasing challenges from terrestrial based competition, relatively low margins and the significant risk and capital spending associated with the company's Spaceway 3 satellite launching in late 2006, offset by modest leverage (3.8x total debt to adjusted EBITDA, pro forma 2004) and good interest coverage (3.2x).
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