S&P rates EHH notes B+, B-

Standard & Poor's said that it assigned a B+ corporate credit rating to EH Holdings Corp., a wholly owned subsidiary of unrated EchoStar Corp.

The outlook is stable.

S&P assigned a B+ issue-level rating and a 3 recovery rating to the company's proposed $1 billion of senior notes due 2019 and a B- issue-level rating and a 6 recovery rating to the proposed $800 million of senior notes due 2021. The 3 recovery rating indicates expectations for meaningful (50%-70%) recovery, and the 6 recovery rating indicates expectations for negligible (0%-10%) recovery.

The proceeds will be used to finance its acquisition of Hughes Communications Inc. and the repayment of Hughes' outstanding debt.

The ratings on EHH reflect an aggressive financial profile and the expectations for negative free cash flow over the next few years because of significant capital spending for the construction of its Jupiter and EchoStar-16 satellites, the agency said.

The ratings consider the company's leading position in the very small aperture terminal industry and a degree of revenue stability with sizable revenue backlog from the very small aperture terminal industry customers and from satellite-TV provider DISH Network Corp. (BB-/stable), the agency added.

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