SIRIUS Lands $250 Million Term Loan (SIRI, XMSR)

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Published: June 5, 2007 4:01 pm

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SIRIUS Satellite Radio Holdings (SIRI-NASDAQ) just received a $250 million term loan from Morgan Stanley. The facility will mature in five and a half years and have covenants substantially similar to those under the Company’s existing 9 5/8% Senior Notes. The proceeds will be used for general corporate purposes. Morgan Stanley is acting as the sole lead arranger and has committed to provide the entire principal amount of the facility, subject to customary closing conditions.

David Frear, EVP and CFO of SIRIUS: "This transaction takes advantage of favorable market conditions and significantly strengthens our balance sheet."

Shares were up 1% for a bit but are now close to flat in after-hours. At $2.85 per share, investors are mostly still underwater since the merger announcement date. This will give the company some extra working capital and a cushion, and now we know who at least one of the creditors will be if the company runs into trouble if the XM Satellite Radio (XMSR-NASDAQ) merger fails. XM has already sold some of the satellite node rights and access essentially as a space-REIT, but it’s always possible they’ll look at the terms and try to do a copycat financing.

Jon C. Ogg
June 5, 2007

Jon ogg can be reached at [email protected]; he does not own securities in the companies he covers.

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