Sirius XM Removed From S&P CreditWatch
The combination will eliminate the intense competition for subscribers and overbidding for programming contracts that has impeded profitability. “We believe the company could achieve significant operating cost savings,” said Standard & Poor’s credit analyst Hal F. Diamond, “though it may be challenged to meet its financial targets of $300 million in EBITDA in 2009, and positive free cash flow.”
New debt the company may wish to issue remains on CreditWatch with developing implications “until additional information becomes available regarding the ultimate capitalization and the effect of cost-saving plans and growth initiatives on secured and unsecured recovery at Sirius and XM.”
This should now enable Sirius to receive much better financing going forward.
[SiriusNewsRumors]
I think this is great news, and should clear up alot about the future financing. This along with the Mad Dog is unbelievable. They better watch it or they will have little to say after labor day, LOL.
I wonder if this is why the stock recovered today and not the Russo news. Hopefully not and the stock climbs higher again on Wednesday.
This is certainly a nice platform to spring off of after the guidance they’ll give in September with more detail on cost reduction efforts, new product lines for the fall, and the Best of Both potential. The more they can give to impact the 2008 4th quarter the better their outlook for the Feb. 09, notes due are.
My hope is that with good forward guidance on programming packages and revenue growth that Mel will also address a combined solution for debt resolution for both the 300 million converts in February and the Credit Facility expiration in
May 09, for $350 Mil. That would wipe out the concerns for debt refinancing by the Street, and me (not that I matter), for 2009 with 59% of their refinancing earlier rather than later.
hmmmm . . . seems like only yesterday Standard & Poor’s had an $8.00 price target on Sirius. I wonder if “their” technical analysis shows a $1.50 breakout for yesterday?
but I guess I’m too harsh . . . especially in light of the bang-up job the credit rating services did in evaluating mortgage-backed securities.
God bless Andrew Cuomo!
snooooooze……No hearbeat on this stock.
Brandon/Tyler:
What are the chances that an outside company would invest in Sirius/XM to take a small interest in it ?
This could really help ease the short-term debt issues if financing is hard to come by at favorable rates.
For example, a Microsoft or Google as people like to hope for invests 300 – 500 million tomorrow. What would be the reason that they would not want to and would Sirius want a company like this to be a major stakeholder ?
I know this might be far out speculation or hope, but just hoping you could expand on this in an article.