S&P affirms Satmex

Standard & Poor's said it affirmed the corporate credit rating on Satelites Mexicanos SA de CV (Satmex).

The agency also said it affirmed the B rating on Satmex's senior secured notes following the $35 million add-on. A recovery rating of 3, indicating 50% to 70% expected recovery in a default, remains unchanged.

The outlook is stable.

The ratings reflect the company's highly leveraged financial risk profile and an expectation of negative free operating cash flow in 2012, S&P said.

The ratings also consider its weak business risk profile, limited fleet, customer concentration risk and operational risks, the agency said.

Partially mitigating these factors are some features inherent to the fixed satellite services industry, such as high barriers of entry given the scarcity of licenses for orbital slots and the high cost of building and operating satellites, S&P said.

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