Moody's affirms EchoStar

Moody's Investors Service said it affirmed all ratings for EchoStar Communications Corp. (EchoStar) and subsidiary EchoStar DBS Corp. (EDBS) following the company's announcement of a proposed $1 billion senior unsecured debt issuance (not rated) at EDBS.

Moody's said EchoStar's ratings continue to reflect expectations of higher costs to grow and retain subscribers in an increasingly competitive operating environment and lack of clarity on management's operational and fiscal strategies.

EchoStar's solid liquidity position, its substantial and growing subscriber base of over 12 million and modest positive free cash flow support the ratings, the agency noted.

The outlook remains stable.

Affirmed ratings include EchoStar's corporate family rating at Ba3, convertible subordinated notes at B2 and speculative-grade liquidity rating at SGL-1 and EDBS's senior unsecured notes due 2014 at Ba3.

The Ba3 corporate family rating continues to reflect expectations of higher costs to grow and retain subscribers in an increasingly competitive operating environment, ongoing concerns about diminishing returns on invested capital and the EchoStar's long term strategic position as a one product company and moderate leverage of 3.6 times, Moody's said.

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