Sirius XM Working On Debt – Not Out Of The Woods
It is not the February debt that made the news today, but rather some of the XM debt from December of this year. SIRIUS XM Radio announced that XM Satellite Radio Holdings Inc., its wholly-owned subsidiary, had exchanged approximately $172.5 million aggregate principal amount of its outstanding 10% Convertible Senior Notes due December 2009 for a like principal amount of its newly issued Senior Secured Notes due 2011. An aggregate of $400 million in principal amount of the 10% Convertible Senior Notes due December 2009 was outstanding prior to this transaction.
In simple terms:
- There was $400 million in debt that was due in December of this year.
- The company exchanged $172.5 million of the debt thereby extending the due date until 2011.
- The new notes also went from senior convertible to senior secured (gives the holder more security).
- $227.5 million worth of the original $400 million remains as it was prior to the transaction.
- Unless or until registered, the notes or shares can not be sold. The party that worked the deal with Sirius XM has not been identified.
- Charles Ergen was making efforts to obtain some of the December debt. Whether this move was with Ergen or not is not known. However, this move does take away leverage from the Ergen activities if it was not with Ergen as it extends the deadlines.
The company has not backed away from a possible bankruptcy, and speculation is that they could file as early as Tuesday, February 17th if they are unable to take care of their obligations on the February 2009 debt due the same day. The company needs a bit less than $180 million to take care of the February debt.
From an investors standpoint, the extension of some of the debt is good news. However, the immediate concern is the February debt, and as yet there is no resolution on this matter. This leaves investors in a bit of a dicey situation, and perhaps a long weekend of mulling over their investment strategies.
Meanwhile news continues about discussion with both Ergen as well as Liberty. Ergen wants control, and the Liberty plan would not involve control.
Some may assume that the February debt may be a done deal because the company is announcing restructuring of December debt. I would caution that this is not a foregone conclusion. Ergen was obtaining February debt for leverage. He gets no leverage by extending the February due date, and perhaps will not even sit at the table to discuss anything other than control. The February debt is still up in the air, and until something is announced on that specific issue, investors should be prepared for anything over the next few days.
Position: Long Sirius XM Radio
I hope there is a chance to buy Tuesday mornng before there is a big pop, unless news changes again and something falls through. I want to buy another big chunk of shares as the threat fades. I didn’t have the balls this a.m. or late in the day.
First survive…to many shareholders who will sell for a few cents up…Sirius will pay off but think 2010 not 10:00 am Tuesday. Hard to fight a guy willing to cash in for his 100 bucks.
siriusbuzz is behind the curve right now….news cycle on this is hours, not days,…
so tyler’s article is already out of date.
NYPost reporting that Liberty has a bridge loan offer to pay all of the February debt.
already moved to 13 cents in afterhours with the article released only a few minutes before the closing bell for afterhours.
You’re right Shark………………..I as a ‘newcomer’ here am suprised at the paucity of commentary I’ve seen of late. I can only, and understandably, attribute this to the ’shell-shock’ experienced by all us, but no doubt especially even so,by the Author’s of this site.
I, for one, am very thankful for the insights and updates the guys on Siriusbuzz provide for us, and the forums they provide for us to exchange ideas and give each other group therapy! So, let’s not be too critical if once in a while they are not “up to the minute.”
I think this site is wonderful and think a lot of us would have been shaken out of this investment a long time ago if it were not for their efforts and intelligence.
Thanks to all!
…. sorry for the ‘down’ moment, but I think many of us have been suffering greatly as of late, and are not at our best.
“I think this site is wonderful and think a lot of us would have been shaken out of this investment a long time ago if it were not for their efforts and intelligence.”
Not to sound negative but maybe getting out a long time ago would have been a good thing.
What do you want us to do parrot information like the rest of the internet? You just said yourself that the NYPost is “reporting”… what should we do, regurgitate that article and put [via NYP] at the bottom?
Charles. Your the only site I have bookmarked.
Charles-
There are always people who will complain. If you give them twelve, they will say “why not thirteen”; then, if you give them fifteen, they will say “why not twenty”.
Most of us appreciate you!
charles – where’s the latest & greatest ?
The sites COOL. Glad I found it and I have it book marked too!!
Inside source says..That is about all we are getting. Nobody will be sure of anything until the ink drys and we know who the players really are, if any. When the principals involved make press releases then start counting your chickens.
I enjoy this site for the articles as well as the insight from the posts.
imho
vaporgold
Good Evening Everyone!
I am announcing that there will be a large victory parade on Tuesday morning . . . try and get to the location early, around 5:00 AM. We will all drive down the street blowing our horns and yelling out the window BOOYAH!
Here is the address where we will be tail-gating:
39 HILLCREST AVE
SUMMIT, NEW JERSEY 07901
The parade is being hosted by Jim Cramer . . . that’s his home address; please be sure to stop by and say hello!
This is the first of my many gifts to Mel! More to come . . .
too funny…lol.
Here’s Jim Cramer’s house….it’s worth about $4M.
http://www.zillow.com/homedeta.....3974_zpid/
If the link doesn’t work, just type in the address.
I will be reporting more details on that later in the week. But first I want to give Jim Cramer a little time to tighten-up his editorial control and do some real reporting on this story.
No theatrics Jim. Just a straight news delivery reporting real facts. You should try it sometime Jim . . . it will set you free.
I think by 10 am tuesday we are looking at 25 cents a share and thats just the beginning (hopefully)
Note to Charlie Ergen:
Now Charlie . . . you were not very nice to our CEO Mel Karmazin in making his personal home phone number public. Imagine all of the aggravation and grief that your disrespectful act caused Mel and his family.
How would YOU like it if someone did that to YOU . . . or if someone were to stage a parade in front of your personal residence because the address was published on the internet. I bet YOU wouldn’t like it very much.
Here’s my advice Charlie . . . take your convertible bonds, go home and live to fight another day. This one ain’t worth the personal aggravation.
Surely you don’t need the same level of aggravation you exposed Mel to 4 years ago when you publicly displayed his home phone # to your TV subscribers, right?
I mean come’on, whats a $175 mil between friends? A simple public apology to Mel would also be helpful in healing these old wounds . . .
You see Charlie, Mel is an extension of the shareholders. When you disrespect Mel, you disrespect us. Obey the Honor Code Charlie.
I think I know where you are going with this one!
lol.
Mel is the man. Go Mel !!
Glad I got 10,000 more at 3:57 on Friday night.
-Mrwirez’s Super EIGHT For Saving Sirius-
These *Shows?* need the AXE-NOW !!
1-OPRAH
2-MARTHA
3-O&A (CBS VERSION-sucks + useless as teets on a bull)
4-ALL Foreign language channels.. (You are in America, M-effer’s)
5-LOCAL? Traffic and Wthr? (Bandwidth user/loser)
6-Foxxhole (SUCKS.. see #5)
7-Stern’s contract: FIVE day’s a week dude (personal pet-peeve)
8- Eff BASEBALL… Yawn + BIG $$ + Roids = S.H.I.T product
Big money people.. numbers 1,2,and 6. These people are NOT broadcasters and work THIRTY MINUTES a WEEK..
-Good Job Mel. In the years to come the *FULL SPECTRUM of BANDWIDTH* will be seen and will prove the MERGER was the right decision. Either XM or Sirius was going to fall, maybe both.
These are the “lean” years with many GROWING pains, and a HORRIBLE economy. Hang in there people… It will get much better. Personally I am going to buy $100 worth of this stock for pennies/share.
-Wirez
Disagree with MLB comment but I like baseball so I am biased. I do think the contractual obligation needs to be reworked during this tough environment.
To the Real James J. Cramer:
Hey Jim, just saw some more drive-by reporting over at your website . . you need to tighten-up the editorial control over there and stop the drive-by reporting.
You see Jim, there’s a certain pumpkin farm in Hunterdon County, NJ that is getting a pretty nice tax break for a bogus farming operation.
See Jim, it works like this. . . when someone gets a property tax subsidy for a bogus Gentlemen’s farm, your neighbors have to reach into their pockets to make up that difference … Christie Whitman tried it Jim, but then she got caught. Ya see? And I didn’t even need to work at a hedge fund to figure out that math, right? It’s called hedging your property taxes!
So, we’re pretty much done here. I think you get the message. I don’t expect this will have to go any further.
BOOYAH Jim.
Mel, this is another of my many gifts to you. As long as the mainstream media continues to misreport this story I will be sending you little gifts like this everyday . . . drip, drip, drip.
Perhaps some of the other media outlets will become more judicious in their reporting . . . we will see. Perhaps they will soon understand in a personal way how their erroneous and misleading reports effect the personal lives of shareholders . . .
GREAT POST!!!!
Not for nothing… but as much as I love my Sirius, this site and I stand by my investment… I am miffed at posting Jim Cramer’s home address. Don’t worry about Jim or any other media crap. Whether or not the media drove the PPS down is actually a good thing in a way for some of us who bought high, as we were able to average down. If you have a PERSONAL issue with Jim… write to Jim. Or use your time to write an editorial to a major newspaper. Posting someone’s personal home address is WAY OUT OF LINE. I was really digging this site until I read that post and I hope that it will soon be deleted. Jim does a lot for his community, more than you will ever know… disagree with him or not… (which I do at times) this man has a family and RoadKill… you went too far. Worry about your own investing, Jim doesn’t rule the investment world… he is just a personality. If what he said mattered you wouldn’t see so much trade activity.
Sorry… that really irked me. Tuesday should be a great day… let’s be thankful for all the info and support SiriusBuzz has given us and the 19 million plus subscribers that has kept this company alive.
whew! glad i stopped and took a breath before I sld out at .o5.
Lets hope Sirius doesn’t go and do something really stupid to drive the stock price down after the bump!