Research Update: Sirius XM Radio Inc. ?BB? Rating Placed On CreditWatch Positive On Announcement With Liberty Media To Simplify Ownership

Liberty Media Corp. and Sirius XM Holdings Inc. (the parent of Sirius XM Radio Inc.) have announced a definitive agreement to combine the Liberty SiriusXM tracking stock group (LSXM) with Sirius XM to create a new public company. As part of the transaction, Sirius XM will assume about $1.5 billion of net debt from LSXM, which we expect will increase its S&P Global Ratings-adjusted net leverage to about 4x at transaction close. Despite the expected near-term increase in leverage, we view the simplified ownership structure as a credit positive. We expect the company to prioritize debt reduction and forecast leverage to decline to about 3.8x in 2024 and 3.3x in 2025. As a result, we placed our 'BB' issuer credit

...- Liberty Media Corp. and Sirius XM Holdings Inc. (the parent of Sirius XM Radio Inc.) have announced a definitive agreement to combine the Liberty SiriusXM tracking stock group (LSXM) with Sirius XM to create a new public company. - As part of the transaction, Sirius XM will assume about $1.5 billion of net debt from LSXM, which we expect will increase its S&P Global Ratings-adjusted net leverage to about 4x at transaction close. - Despite the expected near-term increase in leverage, we view the simplified ownership structure as a credit positive. We expect the company to prioritize debt reduction and forecast leverage to decline to about 3.8x in 2024 and 3.3x in 2025. - As a result, we placed our '##' issuer credit rating on Sirius XM on CreditWatch with positive implications. - We also placed the '##' issue-level rating on the company's unsecured debt on CreditWatch with positive implications. Our '###-' issue-level rating on the company's senior secured debt remains unchanged. - We...

Research Update