Courtesy of Relmor Demitrius
Sirius XM Radio (NASDAQ:SIRI) had a slew of news hit the newswires on Friday. They were added to the NASDAQ Q-50 index and refinanced 800 million in restrictive debt. First news reported was that Sirius XM was offering 550 million dollars in notes that would be used to repay their 2005 500 million dollar bond issue, at 9 5/8%. This was welcome news to Sirius XM investors, as it took down a large bond maturity year of over 1.8 billion dollars in 2013 to 1.3 billion dollars. This reinforces investors views that the company would no longer be caught like it did in 2009, with more debt due than could possible be paid off with cash on hand. As reported last week by KOAT, we predicted that Sirius XM would be removing these exact bonds in a matter of maybe days. This proved to be true. Then the results of the offering came in later that day.
Instead of receiving 550 million dollars, due to strong demand for Sirius XM debt, they were able to raise 800 million dollars instead, a full 250 million dollars more than they originally asked for. Due to the increased amount garnered from the offering, Sirius XM stated they would use the added money to remove a 2012 senior secured loan that had very restrictive bond covenants on them, and limited Sirius XM’s ability in their corporate structure or just general plans moving forward. More
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