A new year, and new hopes for Sirius and the rest of the nation.
As a continuation from last weeks thread, I wanted to post LIBOR/TED Spread's link that he provided for us.
Credit Crisis Watch
This link contains some interesting information on the financial sector that I think is very pertinant to Sirius XM.
A couple of interesting quotes I got from the article:
"Similarly, junk bond yields remain at high levels, as shown by the Merrill Lynch U.S. High Yield Index. However, a slight decline of 200 basis points has taken place since the Index’s record high of 2,182 on December 15. This means the spread between high-yield debt and comparable U.S. Treasuries was 1,982 basis points by the close of business on Tuesday. With the U.S. 10-year Treasury note yield at 2.18%, high-yield borrowers have to pay 22.00% per year to borrow money for a ten-year period."
22% per year? OUCH. That means if Sirius financed 1 billion dollars over 10 years, they would be paying 220 million per year in interest. I repeat: OUCH. Perhaps this, in conjunction with many of the other factors in the article, are why Mel and Co. are waiting as long as possible to refinance?
And this one: "The U.S. Depository Institutions Aggregate Excess Reserves continue to skyrocket far in excess of the amount that banks need to keep on deposit to meet their reserve requirements (see chart below)."
This means that banks have the cash on hand... they are just not lending it.