TEXT-S&P: Sirius XM rating unchanged after stock repurchase

Fri Dec 7, 2012 5:10pm EST

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Dec 7 - Standard & Poor's Ratings Services said today that its corporate
credit rating and outlook on Sirius XM Radio Inc. (BB/Stable/--) is not
currently affected by the announcement that its board of directors has approved
a $2 billion common stock repurchase program and a $325 million special dividend
payable on Dec. 28, 2012. The timing and magnitude of share repurchases have not
been determined by the company. We expect Sirius XM will fund the share
repurchase program through cash, which was $556 million as of Sept. 30, 2012,
discretionary cash flow, and borrowings under its revolving credit facility.

We do not expect leverage will increase above our 4.5x target for the company 
at the current rating despite its adoption of a more aggressive financial 
policy, because of its moderate debt leverage, good operating outlook, and 
growing discretionary cash flow. The lease-adjusted gross debt-to-EBITDA ratio 
declined to 2.9x as of Sept. 30, 2012, from 4.5x a year ago, as a result of 
good operating performance, supported by 9% growth in subscribers and a 12% 
price increase for its basic monthly service in January 2012. Revenues 
increased 14% in the three months ended Sept. 30, 2012, while EBITDA rose 24%, 
as the majority of the company's costs are fixed, except automaker revenue 
share, music royalties, and subscriber acquisition costs.
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