S&P affirms EchoStar

Standard & Poor's said it affirmed EchoStar Communications Corp.'s ratings, including the BB- corporate credit rating, and removed them from CreditWatch, where they were placed on Sept. 26 with developing implications.

The outlook is stable.

EchoStar was placed on CreditWatch following its decision to explore separating into two companies: EchoStar Communications Corp., the core consumer pay-TV business, and EchoStar Holdings Corp., the wholesale set-top box business. The spinoff occurred on Jan. 2, and EchoStar will change its name to DISH Network Corp. on or about Jan. 20.

The agency said it did not raise the rating because it does not believe EchoStar's management has provided sufficient clarity to remove uncertainty about its policies for the company. Conversely, S&P did not lower the rating because leverage at EchoStar only increased to 2.25 times as of Sept. 30 from 2.13 times.

The ratings on the satellite TV provider reflect intense competition from cable TV system operators and its satellite rival, the DirecTV Group Inc., and a degree of financial and strategic policy uncertainty, S&P said.

Tempering factors include healthy customer, revenue and EBITDA growth; good liquidity from growing discretionary cash flow and a sizable cash balance; and generally admirable customer satisfaction metrics, the agency said.

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