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Thread: Sirius XM Stock Thread for October 2010

  1. #101
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    Quote Originally Posted by SiriuslyLong View Post
    I agree, this is the kind of news I want to hear, but I'd also like to understand the net effect.

    There is a cost to it for sure, but there are 2 keys. One is the that the notes being retired are at 11.25% which is a horrible rate. As we know, with rates sooooo low today, SIRI will get a much better deal. Secondly, it's a 5 year extension. 5 years to grow and generate cash.

    Can anyone recreate what Homer posted here a while back. Boy do I miss him.

    http://siriusbuzz.com/forum/showthread.php?t=1348

    What Homer means by that is that when you figure the cost to refinance the old debt it is almost the same OR more as what they are getting from savings in lower interest rates. The benefit is, as you have said they get it pushed out further. I believe homer is just saying find a term were you dont have to refinance anymore and can use COH to pay it off. Forget about stock buy backs or anything else that cost you money that could pay off that debt. I believe I said the very samething when they refinanced the first time after the Liberty deal was all done and saw the cost of the loan and then combared it to the lower interest rate they got what I saw was the cost was actually more in the end.

    For people that dont get it. It is as simple as this example: Which is better a loan that you pay 3% up front on the total loan to get a 0% annual rate for a year OR one that you just have to keep paying 5% amortized annually?????

    1,000 cost 30 dollars as a fee for the year to finance at 0%.

    1,000 at 5% amortized annually is 4.1 dollars for the first month but then is reduced by 83.3 dollars that means now you are only paying 5% on 916.7 dollars so you then pay 3.8 dollars for the next month and so on.

    month 1 = 4.1
    month 2 = 3.8
    month 3 = 3.47
    month 4 = 3.1
    month 5 = 2.7
    month 6 = 2.4
    month 7 = 2.1
    month 8 = 1.7
    month 9 = 1.4
    month 10 = 1
    month 11 = .7
    month 12 = .35

    Total = 26.82

    30 - 26.82 = 3.18 less you would have paid by just keeping your original loan at 5%. Do you see, it cost you more in fees to get the 0% then to just keep paying it off at 5%.



    I believe I also mentioned that XM was in worse shape finanually only because they had to replace satellites sooner then they were supposed to because the satellites were built with faulty equipment.


    Still I know it is better when homer confirms what I say in some long post with links and such.

  2. #102
    Sirius Roadkill is offline
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    Quote Originally Posted by john View Post
    What Homer means by that is that when you figure the cost to refinance the old debt it is almost the same OR more as what they are getting from savings in lower interest rates. The benefit is, as you have said they get it pushed out further. I believe homer is just saying find a term were you dont have to refinance anymore and can use COH to pay it off. Forget about stock buy backs or anything else that cost you money that could pay off that debt. I believe I said the very samething when they refinanced the first time after the Liberty deal was all done and saw the cost of the loan and then combared it to the lower interest rate they got what I saw was the cost was actually more in the end.

    For people that dont get it. It is as simple as this example: Which is better a loan that you pay 3% up front on the total loan to get a 0% annual rate for a year OR one that you just have to keep paying 5% amortized annually?????

    1,000 cost 30 dollars as a fee for the year to finance at 0%.

    1,000 at 5% amortized annually is 4.1 dollars for the first month but then is reduced by 83.3 dollars that means now you are only paying 5% on 916.7 dollars so you then pay 3.8 dollars for the next month and so on.

    month 1 = 4.1
    month 2 = 3.8
    month 3 = 3.47
    month 4 = 3.1
    month 5 = 2.7
    month 6 = 2.4
    month 7 = 2.1
    month 8 = 1.7
    month 9 = 1.4
    month 10 = 1
    month 11 = .7
    month 12 = .35

    Total = 26.82

    30 - 26.82 = 3.18 less you would have paid by just keeping your original loan at 5%. Do you see, it cost you more in fees to get the 0% then to just keep paying it off at 5%.



    I believe I also mentioned that XM was in worse shape finanually only because they had to replace satellites sooner then they were supposed to because the satellites were built with faulty equipment.


    Still I know it is better when homer confirms what I say in some long post with links and such.
    I believe I read somewhere else that the BEP (break-even-point) on the new refi (going from 11.25% maturing 2013 to 7.625% maturing 2018) is 3.5-4 years including fees.

    EDIT: Found it . . . see next post.
    Last edited by Sirius Roadkill; 10-16-2010 at 09:40 PM.

  3. #103
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    SIRIUS XM… A Hell of a Debt Restructuring Job (SIRI)
    Posted: October 13, 2010 at 6:54 pm

    Some management teams know how to work the system better and to take advantage of opportunity in the land of junk bonds better than others. Take a look at the SIRIUS XM Radio Inc. (NASDAQ: SIRI) debt offering tonight and you will see what is a great job in a debt refinancing with lower rates and a longer maturity. SIRIUS XM announced that it priced an offering of $700 million of senior notes due 2018 and the notes priced at PAR value. These are also 144A and Reg. S exempt, so they won’t ever really trade on the market under normal circumstances.

    The annual rate is 7.625% for the $700 million collected from the offering before deducting the initial purchasers’ commissions and offering fees and expenses. XM plans to use the proceeds to repurchase its 11.25% senior secured notes which mature in 2013 under a previously announced tender offer and consent solicitation. Bloomberg listed the amount of the June 15, 2013 maturities outstanding as $525.75 million.

    Sure, there will be fees and the “tender offer and consent solicitation” does not come without costs. The win is that SIRIUS just dropped its interest rates by 3.625% for the duration in comparison and it simultaneously rolled out its debt maturity schedule from 2013 to 2018. If you look through the consents and the prior releases, SIRIUS XM also sold $700 million versus what was expected to be at least $550 million.

    The basics of the consent agreement in the tender announced this morning are as follows: “The total consideration for each $1,000 principal amount of notes validly tendered at or before the Consent Payment Deadline and purchased pursuant to the tender offer will be $1,120. The total consideration includes a payment of $20 per $1,000 principal amount of Notes payable only in respect of Notes tendered with consents at or before the Consent Payment Deadline. Holders validly tendering Notes after the Consent Payment Deadline but at or before the Expiration Time will be eligible to receive only the tender offer consideration of $1,100 per $1,000 principal amount of Notes, namely an amount equal to the total consideration less the consent payment. In addition, holders whose Notes are purchased in the tender offer will receive accrued and unpaid interest in respect of their purchased Notes from the last interest payment date to, but not including, the applicable payment date for the Notes. Tenders of Notes will be accepted only in principal amounts of $1,000 or integral multiples thereof.”

    This is not exactly scientific math and admittedly is being worked out on the fly… If you take the $120 per thousand and use simple math, this 3.625% annualized savings without other consideration of fees and taxes that could differ, on a dollar per dollar basis comes to less than a 3.5-year break-even point. You then have to calculate the other fees, taxes, and considerations, but that likely brings the terms using extremely simple math to a 4-year break-even or thereabouts. In the long-term, this is a hell of a deal on the surface for SIRIUS XM and a management-led cost savings. The company’s most recent balance sheet from June 30 shows that SIRIUS XM carried $3.019billion in long-term debt.

    SIRIUS XM shares rose 3.7% to $1.40 today and shares also today hit a new 52-week high of $1.44 with more than 156 million shares traded.

    JON C.OGG

    LINK: http://247wallst.com/2010/10/13/siri...#ixzz12ZluKPmg
    Last edited by Sirius Roadkill; 10-16-2010 at 09:43 PM.

  4. #104
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    I believe management has acted wisely in getting this done now . . . even despite the costs/fees, if for no other reason than to push-out the maturity . . . as the current interest rate environment could be less favorabale in the future.

    This move also now assures that the company will have sufficient FCF and COH to take-out the individual pieces of long term debt organically, as they mature . . . no more liquidity crises.

  5. #105
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    Quote Originally Posted by Sirius Roadkill View Post
    SIRIUS XM… A Hell of a Debt Restructuring Job (SIRI)
    Posted: October 13, 2010 at 6:54 pm

    Some management teams know how to work the system better and to take advantage of opportunity in the land of junk bonds better than others. Take a look at the SIRIUS XM Radio Inc. (NASDAQ: SIRI) debt offering tonight and you will see what is a great job in a debt refinancing with lower rates and a longer maturity. SIRIUS XM announced that it priced an offering of $700 million of senior notes due 2018 and the notes priced at PAR value. These are also 144A and Reg. S exempt, so they won’t ever really trade on the market under normal circumstances.

    The annual rate is 7.625% for the $700 million collected from the offering before deducting the initial purchasers’ commissions and offering fees and expenses. XM plans to use the proceeds to repurchase its 11.25% senior secured notes which mature in 2013 under a previously announced tender offer and consent solicitation. Bloomberg listed the amount of the June 15, 2013 maturities outstanding as $525.75 million.

    Sure, there will be fees and the “tender offer and consent solicitation” does not come without costs. The win is that SIRIUS just dropped its interest rates by 3.625% for the duration in comparison and it simultaneously rolled out its debt maturity schedule from 2013 to 2018. If you look through the consents and the prior releases, SIRIUS XM also sold $700 million versus what was expected to be at least $550 million.

    The basics of the consent agreement in the tender announced this morning are as follows: “The total consideration for each $1,000 principal amount of notes validly tendered at or before the Consent Payment Deadline and purchased pursuant to the tender offer will be $1,120. The total consideration includes a payment of $20 per $1,000 principal amount of Notes payable only in respect of Notes tendered with consents at or before the Consent Payment Deadline. Holders validly tendering Notes after the Consent Payment Deadline but at or before the Expiration Time will be eligible to receive only the tender offer consideration of $1,100 per $1,000 principal amount of Notes, namely an amount equal to the total consideration less the consent payment. In addition, holders whose Notes are purchased in the tender offer will receive accrued and unpaid interest in respect of their purchased Notes from the last interest payment date to, but not including, the applicable payment date for the Notes. Tenders of Notes will be accepted only in principal amounts of $1,000 or integral multiples thereof.”

    This is not exactly scientific math and admittedly is being worked out on the fly… If you take the $120 per thousand and use simple math, this 3.625% annualized savings without other consideration of fees and taxes that could differ, on a dollar per dollar basis comes to less than a 3.5-year break-even point. You then have to calculate the other fees, taxes, and considerations, but that likely brings the terms using extremely simple math to a 4-year break-even or thereabouts. In the long-term, this is a hell of a deal on the surface for SIRIUS XM and a management-led cost savings. The company’s most recent balance sheet from June 30 shows that SIRIUS XM carried $3.019billion in long-term debt.

    SIRIUS XM shares rose 3.7% to $1.40 today and shares also today hit a new 52-week high of $1.44 with more than 156 million shares traded.

    JON C.OGG

    LINK: http://247wallst.com/2010/10/13/siri...#ixzz12ZluKPmg


    First of all when homer and I were taking about this, if you noticed we talked about the first refinance that matures in 2015 because this new was not done yet. Second if you look at the title of your article you will see this, "A Hell of a Debt Restructuring Job.". As the title notes this is not the normal and even this one does not take into effect all the cost to the barrower from the NEW lender. I believe I saw AT LEAST one cost (because I have no doubt there are others) came to at least 28 million. The savings of 3.625% difference on 700 million will take a year and about 2 months by it self to make up and that does not include the extra cost of the NEW interest rate of 7.625% on the 28 million in fees, which is another 2.13 million or about another month. Not only that but they have now borrowed another 700 million to pay off 526 million, the fact is no matter how much they will get to keep AFTER FEEs and paying off 526 million, they just went into debt another 174 million. Now I would like to hope that they use that 140 million (174 -34 million in fees) to pay off more debt but that is still at question isn't it.


    The point is, it is not all peaches and cream and while it pushes the debt back it cost to do so. I will concede it is something I believe they had to do and you are correct better now then later but anytime I see people write, boy this will save the company lots of money, I feel I have to correct this error because they will tend to just look at the difference in interest rates and think that is what the savings are. The fact is there are savings that come from it but (and this is a big BUT) they start to happen from the point AFTER all the new cost are already figured in. It changes it to a new dynamic. Basically they had to go more into debt and now have to figure that new debt in and then go from there before you figure the savings from it.

    As an example, I worte a post at SRPG that talked about the savings of them paying off debt with cash AND of lower interest rates they got, and how that would save them (actually I should have said "GOT" not "SAVE") about 100 million by 2012. The thing is I used the new dynamic when figuring the amount of savings (actually should have been extra money they got to keep), which is really how much was going to be needed to pay for interest now by 2012 compared to what it used to be. I also only went to 2012 and the fact is they have extended it out even further to 2015. So basically the cost have been just extended over a longer period NOT lowered.

  6. #106
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    Quote Originally Posted by Sirius Roadkill View Post
    I believe management has acted wisely in getting this done now . . . even despite the costs/fees, if for no other reason than to push-out the maturity . . . as the current interest rate environment could be less favorabale in the future.

    This move also now assures that the company will have sufficient FCF and COH to take-out the individual pieces of long term debt organically, as they mature . . . no more liquidity crises.

    Once again, I agree, they needed to do it. There is a difference though between needing to do something and trying to see some other beneift from it that is not there. While you may understand this Sirius Roadkill, I somehow believe there are many that dont. As an example, it is this same misunderstanding of how we got into this banking collapse caused by people not understanding a simple formula and how a mortgage works.

  7. #107
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    Quote Originally Posted by SiriuslyLong View Post
    Stop it John. You and I both said that the market will go down until the election. The election did not occur, and the market has gone up (there's still a chance it will go down - and the Hindenburg Omen still has two weeks to strike lol). Now you're revising / refining / STRETCHING your "theory" to match what's happened. Just man up.

    What I said is that the bad news is beating expectations, and that's the reason for increase. If you choose to belief that the increase is due to the potential for an increase in republican seats, be my guest.

    I just saw this SiriuslyLong, I have been busy lately so sorry it took so long to get back here and answer your post:

    First that is true, I FIRST said that the elections would need to happen for the markets to go up, that was BEFORE I saw any polls STARTING to show what I had said would happen. If you look at dates of my post you will notice that I added the "polls" STILL, WELL BEFORE the market started to come back and AFTER I saw SOME polls coming out saying what I said would happen is going to happen. Now while I have been proven to be correct to many times to count about this stuff, I did miss that the polls would do what they started to do, I did add them in as soon as I saw the first evidence they were going to show what I said would happen AND I might add STILL WELL BEFORE the market started to come back. I am also just one man and dont have that much pull in the markets so big money never knew what I was saying (you know, when I said almost TWO YEARS ago, "That not only will the republicans take back the house in huge numbers but they will run on a much more conservative platform." I could not have called that one more correct, if I wasn't Nostradamus himself). Now while Big money wants certainty they are not stupid and when they see MOST to ALL polls showing republicans are not just going to take back MAYBE 37 to 40 seats but probably 55 to 70 seats they are not going to wait for elections to bore out, that they will get control of congress back (which only takes them getting 39 seats).


    Yes I know what you said and you are telling me that expectations were calling for GDP to come in at less then 1.6%???? I am sorry but I did not see one (although I am sure there were a few that said it would be lower but still much less then the majority of them) that called for Sep. GDP to come in at less then 1.6% and many had it at between 1.7 and 2%. As for Sep. unemployment are you going to tell me 95,000 jobs lost was less then expected to be lost??? Really where are you getting your news from??? Every article I read was that that was not expected and while the big surprise was that unemployment did not go up from 9.6 to 9.7 or 9.8, that that was only because more people have stopped looking and therefore have dropped out of the figure. They are not dumb they know it takes at a very minimum 100,000 to 150,000 jobs created EVERY MONTH to keep unemployment at the same rate. The only other positive was that while the FULL empolyment picture lost 95,000 jobs the private sector gained 65,000 jobs and while that was still in the range of analyst, it was and never will be anything close to a growing economy.

    The problem you are falling into is the same one that the Obama media has fallen into, you are cherry picking the ONE and ONLY positive (not even really a positive but the only thing they got when you consider we need 100,000 to 150,000 jobs a MONTH, JUST TO KEEP UNEMPLOYMENT THE SAME, so even the private sector gaining 65,000 jobs is terrible) and missing all the rest of the negitives. Look it is the same as them saying well we may have lost 95,000 jobs in TOTAL but we gained 65,000 private sector jobs. Do you see the problem yet?? It is that the rest of the sectors had to have lost 160,000 jobs to get the total of 95,000 jobs lost. It is the same when they did it before when we lost private sector jobs but gained public sector jobs (cencus) and then touted the 300,000 job gain. They played it up when they needed to and then played it down when they needed to. It has got to be played the same to get the correct picture and trust me big money is not stupid, they know the games the MSM is playing.


    Once again I have to ask where are you getting your news from???


    Here is a link and I think it proves why it is important to get your news from the riight places.

    Play the video it shows just what I am talking about.

    http://hotair.com/archives/2009/08/3...less-recovery/


    I dont believe, I know. You can not point to one other thing that would bring the market back to those levels besides companies profits being up. Even that does not mean they are up to what they were before the recession and the market being at the level it was before but that they are up. Do a little research and take a look at companies profits and see if they correlate to the same market number. So go back to Aug and Sep of 2009 (when the market was as high as it is now) and see what kinds of profits they were reporting. something tells me already, they are nowhere close.

  8. #108
    SiriuslyLong is offline
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    Quote Originally Posted by john View Post
    I just saw this SiriuslyLong, I have been busy lately so sorry it took so long to get back here and answer your post:

    First that is true, I FIRST said that the elections would need to happen for the markets to go up, that was BEFORE I saw any polls STARTING to show what I had said would happen. If you look at dates of my post you will notice that I added the "polls" STILL, WELL BEFORE the market started to come back and AFTER I saw SOME polls coming out saying what I said would happen is going to happen. Now while I have been proven to be correct to many times to count about this stuff, I did miss that the polls would do what they started to do, I did add them in as soon as I saw the first evidence they were going to show what I said would happen AND I might add STILL WELL BEFORE the market started to come back. I am also just one man and dont have that much pull in the markets so big money never knew what I was saying (you know, when I said almost TWO YEARS ago, "That not only will the republicans take back the house in huge numbers but they will run on a much more conservative platform." I could not have called that one more correct, if I wasn't Nostradamus himself). Now while Big money wants certainty they are not stupid and when they see MOST to ALL polls showing republicans are not just going to take back MAYBE 37 to 40 seats but probably 55 to 70 seats they are not going to wait for elections to bore out, that they will get control of congress back (which only takes them getting 39 seats).


    Yes I know what you said and you are telling me that expectations were calling for GDP to come in at less then 1.6%???? I am sorry but I did not see one (although I am sure there were a few that said it would be lower but still much less then the majority of them) that called for Sep. GDP to come in at less then 1.6% and many had it at between 1.7 and 2%. As for Sep. unemployment are you going to tell me 95,000 jobs lost was less then expected to be lost??? Really where are you getting your news from??? Every article I read was that that was not expected and while the big surprise was that unemployment did not go up from 9.6 to 9.7 or 9.8, that that was only because more people have stopped looking and therefore have dropped out of the figure. They are not dumb they know it takes at a very minimum 100,000 to 150,000 jobs created EVERY MONTH to keep unemployment at the same rate. The only other positive was that while the FULL empolyment picture lost 95,000 jobs the private sector gained 65,000 jobs and while that was still in the range of analyst, it was and never will be anything close to a growing economy.

    The problem you are falling into is the same one that the Obama media has fallen into, you are cherry picking the ONE and ONLY positive (not even really a positive but the only thing they got when you consider we need 100,000 to 150,000 jobs a MONTH, JUST TO KEEP UNEMPLOYMENT THE SAME, so even the private sector gaining 65,000 jobs is terrible) and missing all the rest of the negitives. Look it is the same as them saying well we may have lost 95,000 jobs in TOTAL but we gained 65,000 private sector jobs. Do you see the problem yet?? It is that the rest of the sectors had to have lost 160,000 jobs to get the total of 95,000 jobs lost. It is the same when they did it before when we lost private sector jobs but gained public sector jobs (cencus) and then touted the 300,000 job gain. They played it up when they needed to and then played it down when they needed to. It has got to be played the same to get the correct picture and trust me big money is not stupid, they know the games the MSM is playing.


    Once again I have to ask where are you getting your news from???


    Here is a link and I think it proves why it is important to get your news from the riight places.

    Play the video it shows just what I am talking about.

    http://hotair.com/archives/2009/08/3...less-recovery/


    I dont believe, I know. You can not point to one other thing that would bring the market back to those levels besides companies profits being up. Even that does not mean they are up to what they were before the recession and the market being at the level it was before but that they are up. Do a little research and take a look at companies profits and see if they correlate to the same market number. So go back to Aug and Sep of 2009 (when the market was as high as it is now) and see what kinds of profits they were reporting. something tells me already, they are nowhere close.

    Where am I getting my news from? Fox News!

    The market is not rational John. If 420,000 unemployment claims were projected, and the number came in at 395,000, the market has indeed received this information positively. Fox News reports it John, "the market is up because claims came in lower than expectation." Don't act like it never happened.

    If I had time on my hands, I'd find my exact post where I pointed this out.

  9. #109
    just sirius is offline
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    For anybody interested...except John

    Cos has his own site now...NEWMARKETPLAYERS.COM

    Just kidding John...

    JS
    Last edited by just sirius; 10-20-2010 at 10:19 PM. Reason: shouldn't have posted some stuff

  10. #110
    SiriuslyLong is offline
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    Quote Originally Posted by just sirius View Post
    For anybody interested...except John

    Cos has his own site now...NEWMARKETPLAYERS.COM

    Demian got his panties in a wad and they had a pissing contest! Cos was accused of personal attacks and slanderous comments!!!! Can you believe it...Cos...of all people!

    Just kidding John...

    JS
    So let's count the sites which Sirius Buzz created

    Satwaves
    KOAT
    Satellite Radio Playground
    and now newmarketplayers.com

    It would be interesting to document the chronology of event leading up to all this.

  11. Ad Fairy Senior Member
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