NEW YORK (AP) -- Sirius XM Radio plans to sell $400 million in debt, due in 2022.
The satellite radio company said Wednesday that it may use proceeds from the sale of senior notes to repay or repurchase senior notes due in 2013. The announcement comes a day after Sirius posted solid second-quarter results and raised its profit outlook for the year. Revenue is rising because of strong subscriber growth.
Moody's Investors Service raised its credit rating on Sirius XM after the announcement, citing the greater financial flexibility as well as the company's better subscriber growth. Moody's now rates the company's credit at 'B1', up 'B2', and said the refinancing should reduce Sirius XM's debt balance by about $282 million and reduce its annual interest expenses by around $60 million. The new rating is still "junk" status and is four notches below investment grade.
After the upgrade the firm changed its outlook to stable from positive. The rating applies to $2.8 billion in debt held by Sirius XM.
Shares of Sirius XM Radio Inc. rose 11 cents, or 4.8 percent, to $2.41 in afternoon trading.