Sirius XM Radio Inc. (NASDAQ: SIRI) has caught a debt upgrade from Standard & Poor’s. The cited reasons were that the liquidity position has improved after debt refinancings, and also that its EBITDA is improving.
Based on the new issue of $250 million of senior secured notes, S&P has raised its corporate credit rating on the company to ‘B-‘ from ‘CCC+’ today. It was given a recovery rating of ‘1’ and its outlook is stable. Among other positive mentions were manageable near-term debt maturities, likely operating performance improvements, and cost savings.
S&P revised the recovery rating on Sirius XM’s senior unsecured and subordinated debt to ‘5’, indicating a modest expectation of 10% to 30% for a debtholder recovery in the event of a payment default. The issue-level rating was raised one notch on this debt to ‘CCC+’ from ‘CCC-‘ over an increased estimate of enterprise value.
S&P assigned the proposed $250 million senior secured notes due 2015 a rating of ‘B+’ and assigned the notes a recovery rating of ‘1’ over very high chances of 90% to 100% recovery for noteholders in the event of a payment default.
JON C. OGG
AUGUST 13, 2009
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