SIRIUS XM Radio Inc. (NASDAQ: SIRI) has announced this morning that its XM Satellite Radio Inc. wholly owned indirect subsidiary is offering $350 million in principal amount of Senior Secured Notes. What is interesting is the reception Sirius XM shares are getting.
The net proceeds from the offering will be used to repay all amounts outstanding under its amended and restated credit agreement, and the balance will be used for general corporate purposes.
The notes are due in 2013 and are sold only to qualified institutional buyers under Rule 144A. These are also available outside the United States in compliance with Regulation S under the Securities Act. These securities have not been registered with the SEC nor with any state securities laws. They may not be offered or sold in the United States absent registration, except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws.
The good old “Reg. S” offerings…. Those have not been too frequent since the 1990’s. Shares are actually trading up about 10% at $0.38 before the open this morning. This is a week ahead of the Russell Index reconstitution and rebalancing act next Monday where SIRIUS XM is being booted from the appropriate indexes.
The balance sheet may have changed due to other financings, but as of March 31, 2009 the total combined SIRIUS & XM liabilities are listed as $7.24 billion, with $2.34 billion being short-term current liabilities.
Jon C. Ogg
June 22, 2009
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