S&P lowers Hughes Satellite notes to junk

S&P said it lowered the rating on Hughes Satellite Systems Corp.'s senior secured notes to BB+ from BBB-.

The agency also said it revised the recovery rating to 2 from 1. The 2 recovery rating indicates 70% to 90% expected default recovery.

The rating reflects the additional amount of secured debt in the capital structure following news that the company has increased its notes issuance to $1.5 million, consisting of $750 million of secured notes and $750 million of unsecured notes, S&P said.

The agency also said it affirmed the BB- rating on Hughes’ senior unsecured notes.

The recovery rating remains at 5, indicating 10% to 30% expected default recovery.

The BB corporate credit rating is unchanged and the outlook remains stable, the agency added.

The stable outlook considers an expectation for single-digit percent revenue growth over the next few years, driven by the company's satellite-broadband segment, S&P said.

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