S&P raises credit rating outlook of Sirius XM Radio, citing improving profitability
By APWednesday, November 11, 2009
S&P ups credit rating outlook of Sirius XM Radio
NEW YORK — A credit ratings agency on Wednesday raised its outlook on Sirius XM Radio Inc. and its subsidiaries, citing improving profitability.
Standard & Poor’s Ratings Services upped the company’s credit rating outlook to “Positive” from “Stable.” A “Positive” outlook means that Sirius XM’s rating may be raised over the next six months to two years.
S&P also affirmed the satellite radio company’s B- corporate credit rating. The rating covers Sirius XM’s overall creditworthiness and means the company currently can meet its financial obligations.
S&P said Sirius XM’s profitability has improved, as measured by discretionary cash flow and earnings before interest, taxes, depreciation and amortization.
Profitability improved because Sirius was able to save money from integrating XM Satellite Radio Holdings Inc., which had similar operations. Sirius bought XM in July 2008.
S&P also noted that Sirius XM’s debt leverage has improved. The company, based in New York, had total debt of $3.4 billion as of Sept. 30.
However, Siriux XM’s credit rating remains in “junk” bond territory, reflecting high debt leverage and dependence on U.S. auto sales, which have been weak.
Tags: New York, North America, United States
November 11, 2009: 7:53 pm
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