S&P Affirms Sirius XM (SIRI) at 'BB'; Raises Issuer-Level on $400M Secured Notes

Standard & Poor's Ratings Services today affirmed its 'BB' corporate credit rating on New York City-based Sirius XM Radio Inc. (Nasdaq: SIRI) The outlook is stable.



At the same time, we revised our recovery rating on the company's $400 million of 5.25% senior secured notes due 2022 to '1' from '3' and raised the issue-level rating to 'BBB-' from 'BB', indicating our expectation of improved--now "very high" (90% to 100%)--recovery prospects under our simulated default scenario following the granting of security for lenders in the event of a payment default.



We also affirmed the 'BBB-' issue-level rating on the company's $1.25 billion revolving credit facility due December 2017, the 'BB' issue-level rating on the company's senior notes, and the 'BB' issue-level on its $502 million 7% senior subordinated notes due Dec. 1, 2014. The recovery ratings remain unchanged at '1', '3', and '4', respectively, indicating our expectation of very high (90%-100%), meaningful (50%-70%), and average (30%-50%) recovery, respectively, in the event of a default. 



The 'BB' corporate credit rating on Sirius XM reflects our assessment of the business risk profile as "fair" and the financial risk profile as "intermediate."



The rating outlook is stable, reflecting our view that leverage will not increase above our 4.5x threshold for Sirius XM at a 'BB', despite more aggressive financial policies following Liberty Media's increase in its investment to a majority ownership stake.

You May Also Be Interested In

• Citi Upgrades Sirius XM Radio (SIRI) to Neutral, 'risk-reward is balanced at prevailing levels'
• S&P slashes Boeing credit outlook as rating hovers above junk status
• Stifel Upgrades LeMaitre Vascular (LMAT) to Buy