S&P lowers ratings outlook on Sirius XM Radio
Wednesday November 26, 4:46 pm ET
S&P lowers ratings outlook on Sirius XM Radio to "Negative" on refinancing concerns
NEW YORK (AP) -- Standard & Poor's Ratings Services lowered its outlook on Sirius XM Radio Inc. on Wednesday over concerns about the satellite radio operator's ability to refinance its debt next year.
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S&P reduced its outlook on the company to "Negative" from "Developing" and affirmed its non-investment grade "CCC+" corporate credit rating. Sirius XM had $3.37 billion of debt outstanding as of Sept. 30, according to the ratings service.
"The outlook revision reflects our concern over the company's ability to refinance significant debt maturities in 2009, amid persistently weak credit market conditions," said S&P credit analyst Hal Diamond.
Diamond also said the sharp decline in U.S. auto sales and potentially weak holiday retail demand may hurt Sirius XM's subscriber growth and make it more difficult for the company to meet its near-term financial targets.
He noted that most of the company's 2009 maturities are low-cost debt that may have to be refinanced at higher rates, further impeding discretionary cash flow.
Sirius XM shares rose 3 cents or 19.9 percent, to close at 17.5 cents. The stock has traded between 14 cents and $3.94 during the past 52 weeks.
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