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Thread: New SIRI S-3ASR filing...

  1. #1
    Demian is offline
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    New SIRI S-3ASR filing...

    Any comments on the new S-3ASR filing?

    Automatic Shelf Registration Statement Of Securities Of Well-Known Seasoned Issuers

  2. #2
    SiriusXM - Jason is offline
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    I just read that myself. The prospectus refers to every avenue a company can possibly take to raise capital. Get ready for dilution folks! Personally, I can't wait to get this over with and we can finally start focusing on the company's fundamentals.

    put a 20 multiple on $300M in earnings next year and we got a multibagger from here, even with share dilution.

  3. #3
    SteveSirius is offline
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    Regarding "shelf registrations" - my understanding of shelf registrations is that companies do them so that if and when they want to issue securities they are not delayed by the need to have the Securities and Exchange Commission do a lengthy review their offerings before the company can sell stock. The company will have their lawyers submit their offering documents to the SEC, and then the SEC may comment and ask the company to modify certain language in their offering documents and/or clarify certain wording. This can take some time. Therefore, when a company does a "shelf" registration, it gets all the back and forth stuff done with the SEC before the company intends to offer securities to the public. The company does NOT have to go through with offering the securities just because they do a shelf registration.

    So, it makes perfect sense that Sirius XM would do a shelf registration at this time, having just obtained shareholder approval for issuing more shares of stock if and when the company thinks it is in their best interest to do so. Again, Sirius XM need never finalize this shelf offering. They are just getting their ducks in order, so to speak. I, for one, am happy they are acting proactively to have the foresight to look at their need for funding from many angles.

    Everyone have a Happy New Year!

  4. #4
    homer985 is offline
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    They have nearly $1 billion that needs to be refinanced in the next 12 months - to do so they have to have certain amounts registered and ready to go. The shelf registration is for equity AND/OR debt... so there is no guarantee that there will be equity dilution.

    I'm not suggesting that there won't be, just stating that there is no guarantee that this shelf will all be via equity. All that is known is that they are registering an "indeterminate" amount that is to be issued via debt, equity, preferred shares, Depositary Shares, warrants and/or combinations of such. And given that Sirius and XM have to refinance nearly $1 billion, IMHO this filing was necessary -- because I don't see them refinancing all of it via Rule 144A private placements -- so they have to have various instruments registered and ready to go.

    Let me also point out that Sirius' previous Shelf registration was for $500 million and issued in August 2005; it expired on 12/1/2008 unused. Which means Sirius had no Shelf ready to go... this filing was necessary.

    Seeing this, I expect to see movement on refinancing soon... and I note that they are not registering a specific amount, but rather an "indeterminate" amount, to be used from "time to time". I bet we see new equity, mixed in with new "preferred shares" and/or "warrants" issued to new "investors"... and perhaps some replacement debt. The key to remember is that this is going to refinancing of current debt.

    Last edited by homer985; 12-31-2008 at 04:28 PM.

  5. #5
    TSavery is offline
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    Good points Homer

    One thing to add.

    The debt is now down to about $880 million if I am not mistaken. The Feb has had a few paydowns, and is now at $193 million or so.

    I have been using the $1 Billion number as well, and although $880 million is close to $1 billion, the $120 million is a nice piece of change that many, inclusive of myself, have been overlooking.
    Tyler Savery
    Satellite Standard Founder

  6. #6
    sxminvestor is offline
    Feb down to 193M (conv notes)

    May is 250M (revolving credit facility) + 100M (UBS term Loan)= 350M

    Sept = 2M (conv notes)

    Dec is 400M (conv notes) + 33M (sec conv notes) = 433M

    Still 978M left.

    543M is due by May & with the use of different debt for equity swaps & use of some cash on hand, they should be able to get past this point. But if they could only do that and then maybe by next October get a reasonable term loan for the last 400M.

    What I am trying to understand is how you sell shares or do these debt for equity swaps when the stock price can't get above .12 cents. At least at .25 cents you could raise 250M by selling 1 billion shares, but do the math on .12.

    How could they prop up the stock to do this ?

  7. #7
    Demian is offline
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    976 million is what I had come up with.....where are you getting the info about the 2m in Sept.?

    - Sirius’ $193 million 2.5% convertible, maturing on February 15, 2009.

    - XM’s $250 million revolver, maturing on May 5, 2009

    - XM’s $100 million term loan, maturing on May 5, 2009

    - XM’s $400 million 10% convertible notes, maturing on December 1, 2009

    - XM’s $33 million convertible discount notes, maturing on December 31, 2009
    Last edited by Demian; 01-01-2009 at 12:13 PM.

  8. #8
    sxminvestor is offline
    Look at the Dec 18th- 8k from shareholder meeting, where they break all this down.

  9. #9
    Demian is offline
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    You are right, I had forgot about that one - probably because it was the smallest one. When was that loan taken out and why for such a small amount? Do you know?
    Last edited by Demian; 01-01-2009 at 12:24 PM.

  10. #10
    homer985 is offline
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    Quote Originally Posted by Demian View Post
    You are right, I had forgot about that one - probably because it was the smallest one. When was that loan taken out and why for such a small amount? Do you know?
    If I'm not mistaken, that was from the previous refinancing of 2002/2003 -- when Sirius swapped all of their debt (well most of it) for equity. This was what remained.

    Also, sxminvestor, keep in mind that the $350 million due in May are not Bonds -- they are a term loan and a credit facility. It is far more easier to extend the expiration on these (with updated terms/rates), than it is to refinance it. While investment banks may be unwilling to issue junk bonds right now; and other banks unwilling to loan cash -- they do need to make money on their current loans. And since extending the expiration of the loans won't require any new funds to be issued, just an agreed upon change to the terms... I am not really concerned about these amounts.

    Nor am I concerned about the remaining amounts due in February -- as Sirius has themselves in a position to pay it down with cash, equity swaps and perhaps a small $100 million term loan of their own, as they are not as levered as XM.

    The September amount will be taken out with cash, easily; and the $33 million at the end of next December are bonds that Honda owns -- I don't see them pushing the company into default, given the amounts of cash that they get from XM... those will be reworked, if not repurchased by XM.

    My only concern is the $400 million that mature in December next year.

    Last edited by homer985; 01-01-2009 at 12:54 PM.

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