The satellite radio monopoly announced that on September 20 it will redeem all of its outstanding 13% senior notes due 2013. As of August 21, 2012, a sum of $681,517,000 of the 13% notes is outstanding. Pro forma for the 13% notes redemption, the previously announced redemption of its 9.75% senior secured notes due 2015 and the issuance on August 13, 2012 of $400,000,000 of 5.25% senior notes due 2022, SIRIUS XM would have had $2,441,095,000 of total long-term debt as of June 30, 2012.
The company’s chief financial officer said that the successful issuance of the 5.25% notes and its strong cash position allows SIRIUS to retire all of the 13% notes more than 10 months prior to maturity. After this redemption, SIRIUS XM will not have a note maturity all the way out to December 1, 2014.
Today’s news had been somewhat telegraphed, but it is amazing to see that a company like SIRIUS XM Radio can issue 5.25% debt. That is what an extremely low-rate Treasury environment and a high demand for high yield debt can offer companies.
SIRIUS shares are up 1.5% at $2.60 in premarket trading and the 52-week high is $2.64.
JON C. OGG
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