Investing
Strong Demand Drives SIRIUS Cash Raising Efforts (SIRI)
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SIRIUS XM Radio Inc. (NASDAQ: SIRI) has raised more cash through its XM Satellite Radio Inc. unit than it originally projected. We were looking for a raise of some $350 million, but the newly priced offering was for a face value amount of $525,750,000.00. The reason is “strong investor demand.”
Again, these are ‘144A’ and ‘Reg. S’ exempted private placement securities, so they will not be on the open market. The notes carry an 11.25% interest rate and were sold at $95.093. So the gross proceeds are actually about $499.95+ million before fees, commissions, and expenses.
The funds from this offering will be used to pay down all amounts outstanding under its amended and restated credit agreement, to replace the $150 million second-lien credit agreement with Liberty Media Corporation (terminated upon this offering); and to refinance or repay other debt. Any balance remaining is available for “general corporate purposes.”
Shares of SIRIUS XM Radio are now up 12% at $0.44+ on very active trading volume.
Jon C. Ogg
June 25, 2009
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