A few days after Sirius XM reported its Q3 financial results, Standard & Poor’s has revised its credit rating outlook for the company from “stable” to “positive.”
S&P also affirmed its ratings on the company and its subsidiaries, including the B- corporate credit rating. The rating agency noted that Sirius XM had total debt outstanding of $3.4 billion as of September 30, 2009.
“The outlook revision reflects improving operating performance and positive discretionary cash flow since Sirius XM Radio’s July 2008 acquisition of XM Satellite Radio Holdings Inc.,” explained Standard & Poor’s credit analyst Hal F. Diamond.
According to S&P, Sirius XM’s rating reflects its high debt leverage and dependence on weak U.S. automotive sales, and “modest – albeit increasing – discretionary cash flow.” The company’s position as the only US satellite radio operation and ongoing integrated-related operating synergies and cost savings are modest positives that do not offset these risks, the outlook update said.