Moody's rates Sirius XM notes Caa2

Moody's Investors Service said it assigned a Caa2 rating to Sirius XM Radio Inc.'s proposed $250 million of senior secured notes due 2015.

Sirius XM plans to use the proceeds from the offering to repay the $250 million outstanding under Sirius XM's term loan agreement with Liberty Media Corp., Moody's said, adding that it believes the offering modestly improves the intermediate-term liquidity profile by reducing interest expense by about $10 million per year, pushing out the final maturity from 2012 to 2015, and eliminating quarterly amortization that would have begun in 2010.

The notes are secured by a pledge of substantially all of Sirius XM's assets and are guaranteed by all of Sirius XM's wholly owned domestic subsidiaries, including its FCC license subsidiary; notably, however, the liens on Sirius XM's senior secured credit facility will have priority over the liens securing the notes, the agency stated.

According to the agency, Sirius XM's Ca corporate family rating and Caa3 probability of default rating are not affected due to ongoing concerns regarding the long-term cash sustainability of the business model within the existing capital structure.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.