Fitch Assigns 'BB-' Rating to Echostar DBS Corp. Senior Notes.

CHICAGO -- Fitch Ratings has assigned a 'BB-' rating to Echostar DBS Corporation's $500 million offering of 7% senior notes due 2013. The notes will rank equally with the other debt outstanding at Echostar DBS Corporation. Proceeds from the note offering will be used to fund the early redemption of the company's floating rate senior notes due 2008 on Oct. 1, 2006. Echostar DBS Corporation is a wholly owned subsidiary of Echostar Communications Corporation (Echostar). The Issuer Default Rating (IDR) for Echostar and Echostar DBS Corporation is 'BB-'. The Rating Outlook is Stable.

Fitch's ratings incorporate Echostar's lack of revenue and service diversity as well as the increasing business risks connected to Echostar's credit profile stemming from the intense competition for subscriber market share with cable multiple systems operators. Fitch anticipates that the competitive environment will only intensify as the cable MSOs' voice over Internet protocol telephony service gains scale and the telephone companies continue with the introduction of video service. From Fitch's perspective, the lack of revenue and service diversity, primarily stemming from the limitations inherent with Echostar's satellite infrastructure, weakens the company's competitive position and ability to respond to the changing and riskier operating environment.

Fitch's ratings also reflect the operating leverage derived from Echostar's size and scale as the fourth - largest multichannel video programming distributor in the United States, the company's solid liquidity position, and expectation for continued free cash flow generation.

Fitch's Stable Rating Outlook reflects the consistent subscriber economic trends as well as the positive EBITDA and free cash flow prospects expected over the near term balanced with the very competitive operating environment. Outside of the announced share repurchase authorization; Fitch views the use of cash for shareholder friendly actions as an erosion of financial flexibility that could result in pressure on the ratings or an Outlook revision. Additionally, Fitch has concerns related to the uncertainty surrounding the company's broadband strategy and the potential cash requirements to launch a wireless broadband service.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site. The issuer did not participate in the rating process other than through the medium of its public disclosure.