Sirius XM Radio announced today that XM Satellite Radio (a unit of the company) sold $525 million in four-year senior secured notes. The move, which dealt with more money than originally anticipated will improve cash flow, is at a lower interest rate, and does away with quarter amortization payments that the company was having to make.
The additional funds above and beyond what was announced last week will now take care of all of the Liberty Media loan to XM which was at an interest rate of 15%. The new facility improves that rate to 11.25% with a yield of 12.85%. The original $250 million that Liberty loaned to Sirius will still exist. This move cleans up the XM books moving forward and allows Sirius XM to better the overall balance sheet and improve cash flow. JP Morgan facilitated the deal.
Sirius XM stock traded higher on the news.
Position - Long Sirius XM, No Position Liberty Media