Research Update: Sirius XM Radio LLC Rating Raised To 'BB+' From 'BB' On Simplified Ownership Structure; Outlook Stable

Sirius XM Inc. (the parent of Sirius XM Radio LLC) has completed its merger with the Liberty SiriusXM tracking stock group (LSXM) to create a new company, Sirius XM Holdings Inc. We view the simplified ownership structure as a credit positive and expect leverage will remain below our 4x upgrade threshold over the next few years. We therefore raised our issuer credit rating on Sirius XM Radio LLC to 'BB+' from 'BB'. We removed our rating on Sirius XM from CreditWatch, where we placed it with positive implications on Dec. 12, 2023. We also raised our issue-level rating on the company's senior unsecured debt to 'BB+' from 'BB'. The issue-level rating on the company's senior secured debt is unchanged at

...- Sirius XM Inc. (the parent of Sirius XM Radio LLC) has completed its merger with the Liberty SiriusXM tracking stock group (LSXM) to create a new company, Sirius XM Holdings Inc. - We view the simplified ownership structure as a credit positive and expect leverage will remain below our 4x upgrade threshold over the next few years. - We therefore raised our issuer credit rating on Sirius XM Radio LLC to '##+' from '##'. We removed our rating on Sirius XM from CreditWatch, where we placed it with positive implications on Dec. 12, 2023. - We also raised our issue-level rating on the company's senior unsecured debt to '##+' from '##'. The issue-level rating on the company's senior secured debt is unchanged at '###-'. - The stable outlook reflects our expectation that Sirius XM's leverage will approach 3.7x over the next year from current pro forma leverage of 3.9x. Although we expect EBITDA will be relatively flat over the next year, we believe the company will prioritize debt reduction until...

Research Update