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Moody's gives Caa2 to EchoStar, cuts Hughes, DISH
Moody's Investors Service said it assigned a Caa2 corporate family rating and a Caa2-PD probability of default rating to EchoStar Corp. following EchoStar's acquisition of DISH Network Corp. on Dec. 31.
Concurrently with this assignment, Moody's said it withdrew the following CFRs of EchoStar's subsidiaries: 1) the Caa1 CFR and Caa1-PD PDR of Hughes Satellite Systems Corp.; 2) the Caa1 CFR and Caa1-PD PDR of DISH; and 3) the Caa1 CFR and Caa1-PD PDR of DISH DBS Corp.
Hughes' senior secured notes were downgraded to Caa1 from B2, and its senior unsecured notes were downgraded to Caa3 from Caa2. DISH's spectrum-backed senior secured notes were downgraded to Caa1 from B2, and its senior unsecured convertible debt was downgraded to Caa3 from Caa2.
DBS' backed senior secured debt was downgraded to Caa1 from B2, and its senior unsecured debt was downgraded to Caa3 from Caa2.
EchoStar was assigned a speculative grade liquidity rating of SGL-4, reflecting weak liquidity.
The outlook for EchoStar, DISH, Hughes and DBS is negative.
Moody’s said EchoStar's Caa2 CFR reflects high and still rising consolidated debt leverage of around 8.6x (Moody's adjusted) for the latest 12 months period ending Sept. 30, 2023, pro forma for EchoStar's acquisition of DISH. Moody's expects the company's debt leverage (Moody's adjusted) to continue elevating to even higher levels of around 10.9x and 11.7x at year-end 2024 and 2025, respectively.
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