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S&P zaps EchoStar, ups Dish, cuts notes
S&P said it lowered its ratings for EchoStar Corp. and Hughes Satellite Systems Corp. to CCC- from CCC+. The agency also raised its issuer ratings for DISH DBS Corp. and Dish Network Corp. to CCC- from CC because imminent default is not a certainty.
The agency said it also cut Dish Network’s secured notes to CCC+ from B, Dish DBS’ secured notes to CCC from B-, Dish DBS’ unsecured 2024 tranche to CCC- from CCC+, Hughes’ secured notes to CCC+ from B and its unsecured notes CCC- from CCC+.
Additionally, S&P raised the recovery rating on the Dish Network unsecured convertible notes to 5 from 6 to reflect prospects for modest (10%-30%) recovery in a default based on the current capital structure. The rating remains CC.
Lenders rejected EchoStar’s previous exchange offers, and S&P said it sees an increased default risk.
“We believe EchoStar will need to raise at least $2 billion in external capital to repay its November 2024 maturity. However, given the ongoing cash burn, which is subject to wide variation, we believe it's possible the company could exhaust its cash balance prior to November considering it does not operate with a revolving credit facility,” S&P said in a press release.
The outlook is negative.
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