Tear Sheet: Sirius XM Radio Inc.

As part of the proposed transaction, the company will assume LSXM's $575 million 3.75% convertible notes due 2028. We expect Sirius XM will refinance LSXM?s other debt by drawing on its recently obtained $1.1 billion delayed draw incremental term loan. We anticipate the company's S&P Global Ratings-adjusted net leverage will be about 4.0x as of the close of the transaction in the middle of 2024, which is up from 3.4x as of the end of 2023. However, Sirius XM generates more than $1 billion of free operating cash flow (FOCF) annually, which supports deleveraging. While the company's dividend policy will remain unchanged (about $410 million expected in 2024), management has said it expects to deemphasize share repurchases and focus on

...Foreign currency issuer credit rating ##/Watch Pos/-- Local currency issuer credit rating ##/Watch Pos/-- Business risk Satisfactory Country risk Very Low Industry risk Intermediate Competitive position Satisfactory Financial risk Significant Cash flow/leverage Significant Anchor ##+ Diversification/portfolio effect Neutral (no impact) Capital structure Neutral (no impact) Financial policy Neutral (no impact) Liquidity Strong (no impact) Management and governance Neutral (no impact) Comparable rating analysis Negative (-1 notch) Stand-alone credit profile ##...

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