Bulletin: Sirius XM Radio's Acquisition Of Pandora Won't Trigger A Rating Change, But Will Weaken Credit Metrics And Margins - S&P Global Ratings’ Credit Research

Bulletin: Sirius XM Radio's Acquisition Of Pandora Won't Trigger A Rating Change, But Will Weaken Credit Metrics And Margins

Bulletin: Sirius XM Radio's Acquisition Of Pandora Won't Trigger A Rating Change, But Will Weaken Credit Metrics And Margins - S&P Global Ratings’ Credit Research
Bulletin: Sirius XM Radio's Acquisition Of Pandora Won't Trigger A Rating Change, But Will Weaken Credit Metrics And Margins
Published Sep 24, 2018
3 pages (1102 words) — Published Sep 24, 2018
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Abstract:

CHICAGO (S&P Global Ratings) Sept. 24, 2018--S&P Global Ratings today said that New York City-based satellite radio broadcaster Sirius XM Radio Inc.'s (BB/Stable/--) announcement that it will acquire internet streaming radio broadcaster Pandora Inc. in an all-stock deal is in line with our expectation for leverage to remain in the 3x to 4x range. We assume that leverage will increase about a half a turn, to 3.7x from 3.2x as of June 30, 2018, based on Sirius assuming $345 million of debt and consolidating Pandora's operations, which currently generate EBITDA deficits. While we don't currently anticipate a rating change as a result of the acquisition, we view the acquisition as slightly negative to our overall view of Sirius XM's credit

  
Brief Excerpt:

...CHICAGO (S&P Global Ratings) Sept. 24, 2018--S&P Global Ratings today said that New York City-based satellite radio broadcaster Sirius XM Radio Inc.'s (##/Stable/--) announcement that it will acquire internet streaming radio broadcaster Pandora Inc. in an all-stock deal is in line with our expectation for leverage to remain in the 3x to 4x range. We assume that leverage will increase about a half a turn, to 3.7x from 3.2x as of June 30, 2018, based on Sirius assuming $345 million of debt and consolidating Pandora's operations, which currently generate EBITDA deficits. While we don't currently anticipate a rating change as a result of the acquisition, we view the acquisition as slightly negative to our overall view of Sirius XM's credit profile, stemming from the increase in leverage and Pandora's participation in the highly competitive online music streaming business. Longer term, the investment in Pandora may provide a growth opportunity for Sirius XM around the time that its satellite...

  
Report Type:

Bulletin

Ticker
SIRI
Issuer
Sirius XM Radio Inc.
Sector
Global Issuers
Country
United States
Region
United States
Format:
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MLA:
S&P Global Ratings’ Credit Research. "Bulletin: Sirius XM Radio's Acquisition Of Pandora Won't Trigger A Rating Change, But Will Weaken Credit Metrics And Margins" Sep 24, 2018. Alacra Store. May 08, 2025. <http://www.alacrastore.com/s-and-p-credit-research/Bulletin-Sirius-XM-Radio-s-Acquisition-Of-Pandora-Won-t-Trigger-A-Rating-Change-But-Will-Weaken-Credit-Metrics-And-Margins-2104426>
  
APA:
S&P Global Ratings’ Credit Research. (). Bulletin: Sirius XM Radio's Acquisition Of Pandora Won't Trigger A Rating Change, But Will Weaken Credit Metrics And Margins Sep 24, 2018. New York, NY: Alacra Store. Retrieved May 08, 2025 from <http://www.alacrastore.com/s-and-p-credit-research/Bulletin-Sirius-XM-Radio-s-Acquisition-Of-Pandora-Won-t-Trigger-A-Rating-Change-But-Will-Weaken-Credit-Metrics-And-Margins-2104426>
  
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