Moody's rates EHH notes Ba3, B3

Moody's Investors Service said it assigned first-time ratings to EH Holding Corp. comprised of a B2 corporate family rating and a B2 probability of default rating. Moody's assigned EHH's $1 billion of eight-year senior secured notes a Ba3 (LGD2, 23%) rating and its $800 million of senior unsecured notes a B3 (LGD5, 70%) rating.

The outlook is stable.

The company was also assigned an SGL-3 speculative-grade liquidity rating.

EHH is an indirect, wholly-owned subsidiary of EchoStar Corp., the agency noted. The ratings are being assigned in connection with EchoStar's agreement to acquire 100% of Hughes Communications, Inc.

The ratings consider weak coverage and negative free cash flow resulting from the company's intensive capital expenditure activities, the agency said. These have dominated recent pro forma financial results and will continue to do so for at least the next two to three years.

The ratings are supported by the sponsorship of EchoStar as well as EchoStar's large cash balance that could be helpful to EHH as it completes its capital expenditures, the agency added.

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