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S&P ups Sirius to positive
Standard & Poor's said it revised the outlook on Sirius XM Radio Inc. to positive from stable, reflecting the company's improving operating performance, declining debt leverage and prospects for continued strengthening in credit measures for 2011.
S&P also affirmed the ratings on the company and its XM Satellite Radio Inc. subsidiary, including the BB- corporate credit rating.
The BB- rating on Sirius XM reflects the expectation that revenue and EBITDA will increase in 2011, resulting in debt leverage in the low-4x range and interest coverage in the low- to mid-2x range, the agency said.
Sirius XM faces significant hurdles to maintaining consistent, long-term growth, including the need to broaden subscriber demand and reduce churn in line with other satellite entertainment providers, the agency added.
The positive outlook reflects the view that a continued recovery in auto sales will support growth and strengthen credit measures over the near to intermediate term, S&P said.
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