S&P revises Sirius XM note recovery

S&P said it revised its recovery rating on Sirius XM Radio Inc.'s senior unsecured notes to 4 from 3 and affirmed its BB issue-level rating.

This revision follows the company's issuance of a new, unrated $500 million senior secured term loan, which reduced the collateral value available for unsecured noteholders in a default scenario, the agency said. The 4 recovery rating indicates average (30%-50%; rounded estimate: 45%) recovery in default. A 3 recovery rating indicates meaningful (50%-70%) recovery.

Sirius XM is expected to use the loan proceeds to repay a portion of the borrowings under its $1.75 billion revolving credit facility, which it borrowed from to fund a special dividend totaling about $1 billion in February.

The BBB- issue-level and 1 recovery rating on the company's senior secured revolving credit facility remains unchanged, S&P said.

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