Sirius XM Increases Offer to Purchase 3.25% Notes
In a move demonstrating a strong desire to retire the 3.25% notes due 2011, Sirius XM Satellite Radio has increased their offer to $1010.00 per $1,000 from the previously offered premium of $1007.50. When the company made the initial announcement on March 24, 2011, they would have a savings of just under $1 million. The new offer will still offer the company savings, but it will trim those savings down slightly but the transaction is still worth while if they can get the holders to sell.
The company is offering a slight premium over what the holders of the notes would get. The notes are due October 15, 2011. Sirius XM has made great strides with their debt over the past couple of years, and this move, while small in comparison to others they have done, helps clean up the books for the company.
Position - Long Sirius XM Radio
Why do you think they are so concerned about these converts? They only save 4 months of payments.
If they can save money it is worth doing.
Some months from now, it will be forgotten this debt was removed.
But for anyone comparing the quarterly financial statements, they will see a reduction in debt at the end of the quarter.
That’s a good perception.
It pays off debt six months early which shows Sxm’s cash position is adequately growing to do this earlier. Paying it off earlier also speeds up the process to get investment grade credit, thus helping us refinance the other debt at much better rates. It’s all good news.