Moody’s Downgrades Sirius XM’s Ratings
Citing a negative outlook for approximately $2.2 billion million of rated debt instruments, Moody’s Investors Service downgraded Sirius Satellite Radio Inc.’s probability of default rating (PDR) and corporate family rating (CFR) to Ca from Caa1. Ratings and loss given default assessments of debt instruments issued by Sirius and its wholly-owned subsidiaries, XM Satellite Radio Holdings Inc. and XM Satellite Radio Inc. were adjusted accordingly. The rating outlook is negative.
“The company’s speculative grade liquidity rating (SGL) remains positioned at SGL-4 (indicating poor liquidity). With nearly $1.0 billion of its $3.3 billion total debt coming due in the New Year ($190 million in February, $350 million in May and $433 million in December), and given the current background of capital market dislocation and the company’s poor liquidity situation, the rating actions anticipate that Sirius will be unable to repay or refinance its maturing debts without negotiating some sort of compromise arrangement with at least a portion of the affected constituents.
Sirius has already initiated transactions to refinance portions of its debt. In recent weeks, the company has completed a number of “3(a)(9)” equity for debt exchanges. Despite the potential of certain benefits such as a net reduction in debt and a lower total interest burden, Moody’s considers these transactions as being analogous to a distressed exchange of the applicable debt instruments based on the perspective that the company is under financial stress.
Moody’s expects additional refinance activity that may include additional equity for debt exchanges as well as other alternatives to be highly likely. This is reflected in the PDR revision. In turn, this causes the CFR revision as well as changes to the ratings and LGD assessments of individual debt instruments. The negative outlook is reflective of possible further rating pressure pending refinance activities and the likely debt structure that will result.”
Position – Long Sirius XM
This has BK written all over it. Hartleib is right on.
TYLER
If there was strong plans to file a BK why would SIRI be paying off any debt before a BK and why do investors hold on to such high amount of shares…Would they not divest all their shares they hold? Some are even buying more recently.
Ameriprise Financial, Inc. 174,858,091
APOLLO MANAGEMENT IV, L.P. 91,857,857
PRICE (T.ROWE) ASSOCIATES INC 84,673,669
OPPENHEIMER FUNDS, INC. 83,658,086
Barclays Global Investors UK Holdings Ltd 82,359,262
VANGUARD GROUP, INC. 81,317,278
JENNISON ASSOCIATES LLC 61,931,684
INTREPID CAPITAL MANAGEMENT INC/NY 38,195,013
STATE STREET CORPORATION 36,581,290
Clearbridge Advisors, LLC 33,976,242
TOP MUTUAL FUND HOLDERS
Holder Shares % Out Value* Reported
RiverSource Growth Fd 54,167,369
OPPENHEIMER GLOBAL FUND 49,490,123
PRICE (T.ROWE) MID CAP GROWTH FUND 40,000,000
RiverSource Large Cap Equity Fd 36,484,405
VANGUARD MID-CAP INDEX FUND 24,993,839 8
JENNISON 20/20 FOCUS FUND 24,328,940
Legg Mason Partners Aggressive Growth Fd 21,973,400
VANGUARD TOTAL STOCK MARKET INDEX FUND 20,799,673
PRUDENTIAL SERIES FD-VALUE PORTFOLIO 20,650,200
PRUDENTIAL SERIES FD-EQUITY PORTFOLIO 20,187,800
Hope,
Not sure where you got your numbers from, but if it is from MFFAIS or NASDAQ, it is most likely from SEC filings that are old. Institutions have to file within 45 days of the end of their quarter a list of their holdings at the end of the quarter. There is no data, that I am aware of, which allows me to see what holdings they have right now.
egis, are you seriously implying that many of these mutual funds liquidated nearly 1 billion shares since October 1st?
Highly unlikely.
EGIS..
they are from SEC 3Q filings that are old but recent maffais still show ownership in similiar amounts.
MY POINT IS…
what would any of them hold even one share of stock? ALL the maffais reports would show huge volume sellers.
Charles, ya gotta trust me on this one . . . this post DOES have a direct connection to the article, ok?
Time for a little quiz friends, a little “Cash Cab” if you will. Ok, ready. Here ya go. 1st one with the correct answer gets a free lifetime subscription to SiriusBuzz courtesy of the very patient “Charles.”
WHAT CONNECTION IS THERE BETWEEN THE FOLLOWING NYC ADDRESSES?
1221 AVENUE OF THE AMERICAS
1230 AVENUE OF THE AMERICAS
The answer will require a little research but think in context of Tyler’s article and several of the posts above. Ready. GO!
1221 – sirius
1230 – viacom/cbs
so what?
wrong
Give me some credit…I’m at least right about SIRI headquarters
1230: Kurtzman Carson, LLC
# 1 Bankruptcy firm in US in 2007
Currently handling WorldSpace liquidation
Mel can walk across the street and save the cab fare!
Part of the Rockefeller Center??
Mark . . . thanks for playing . . .see answer above!
1221 – Howard Stern
1230 – Apollo Blackstone?, Or Direct TV, or CBS, or TWC, or ………..
socal . . . good creative guesses; see answer above.
Pissed off that I missed it, damn it!
from today’s NY Times:
But those competitive threats remain secondary to the urgency of Sirius XM finding a way to extract itself from the financial vise visited upon it by its heavy debt. Mr. Cheen, the debt analyst at Wachovia, has this stark assessment: “The bare economics of it cannot appropriately service the capital load.”
During the shareholder meeting, Mr. Karmazin acknowledges that bankruptcy is a possibility if the company cannot reach agreement with lenders, but he says it is unlikely.
“You have to play the hand you’re dealt,” he says in the interview. “Right now, I don’t like my hand. But we’ll play it.”
I think Mel just peed in the kiddie pool
It also looks like there is a baby-ruth candy bar in that kiddie pool.
SRK…Krypto1…SCRF..
The statements Mel has made since the merger at this point in time leaves stockholders with a lot of doubt.Rhyu bailing does not look good, the Moody report does not look good.Maybe you guys are right.
It was just the last thing I wanted to see, and I got up yesterday morning feeling good that maybe they were starting to service debt, what a turn around day!!
Kryptol…
The information is well worth reading at info turnaround.The vote on the RS, share issue and CEO and directors was like 75% to 25%.
I wonder if that percentage would change?
vaporgold
Tyler, Newman,Charles, Brandon, Vapor, SRK, GIS, Stockbeater, Dread,Cos, Knucklehead (you know who you are), Krpto, and all posters. Merry Christmas and Happy Holidays.
Vapor, I’ve been where SRK is now, for about two months. Hopefully a 2009 miracle occurs and something good happens.
I am unable to discount the continued news from agencies like Moody’s etc. When the analyst’s turned on Mel and company,the had been positive, you just had to wonder.
I do hope that some last minute hail mary pulls this thing out for all of us longs. Or not………, in which case I will join up with a future legal action. What other recourse is their.
It’s funny you know. My son loves the product. I continue to pay his three month subscription fees. But reality is, few his age even know the product exists, go figure.
I did see a very nice Sirius product at Costco this week. Well done stand alone product and very well done display. And it appeared quite a few had sold.
Cross your fingers and wish upon a star??????????
Dread thanks for spelling the Ramen correctly. We have one vote for Shrimp. One for spicy. Mine is Beef. SRK, corrected me by saying it takes three shares of siri, to get a package now. Inflation?
Thanks to Tyler and everyone at Siriusbuzz. Tyler my regrets that you receive pathetic emails of that caliber. You have been very fair at letting others voice and type their opinions, including having M. Harleib on your show.
Thank you again. Happy Holidays. God Bless.
“It’s funny you know. My son loves the product. I continue to pay his three month subscription fees. But reality is, few his age even know the product exists, go figure.”
Socalrunningfool… what you say gets right to the heart of the matter. I have tried to figure out why this product is so beloved by some, while on the other hand a vast segment of the population is unaware of it’s existence! I have never encountered anything quite like this, EVER!
The promotion and marketing of this product/service has been an abject failure of epic proportions, and more than anything else is the reason for the death spiral we are now witnessing. People are still driving cars. Millions of those cars do not have satellite radio in them. Nobody has the radio in the house! These guys never figured out how to get people to listen to satellite radio outside of the car! It is very simple, believe me; I listen to it for hours each day, and it is fantastic. Or am I some kind of weirdo that likes to listen to radio? It may not be the cool thing to do, but I like it and I don’t give a damn what any I-pod listening asshole thinks.
I will say it again; people under 30 years of age don’t listen to radio, they don’t care about radio, and they DO NOT THINK SATELLITE RADIO IS COOL !!! By the same token, I love listening to radio, specifically satellite radio, and I think most of the technology out there is a bunch of bullshit. This country has produced a generation of technology/gizmo obsessed geeks who are more interested in text messaging and playing those Goddamn waste of time video games than listening to music, talk, etc. I have a simple yet very fine 2 channel stereo, and when I dock my Sirius radio into it I am in radio heaven. People have no idea what they are missing, but the days of listening to music on a real audio system are long gone, I’m afraid. That’s a whole other thing I could rant about – don’t get me going!
These two things are killing Sirius/XM: Nobody under 30 gives a shit about it, and practically nobody listens to it outside the car. Great music belongs in the house, and it makes each day more pleasant every time I turn on satellite radio. As a bonus, I can turn radios on in other rooms and listen to it!
You know what the real problem is? The real problem is that music just doesn’t seem to matter to a lot of people anymore. So many people are so consumed by mindless pursuits these days that music is just another thing that they have trimmed from their souless, pathetic little inconsequential lives. It’s not easy convincing stupid people that something is worthwhile and a potential asset. I have tried, and I am exhausted. The under 30 set ain’t into it. The rejection of satellite radio by that demographic is perhaps the single most damaging blow that Sirius/Xm has, or will ever encounter.
Well, I think the younger generation are into music. I don’t buy that they are consumed by “mindless pursuits”. To be honest, it takes more brainpower to play a video-game than do listen to music.
The problem is they have rejected a lot of Radio. The MP3 player has made it easier to carry around whole album collections.
Also, for good or for ill people a resistant to paying for music anymore, especially since file-sharing and the Internet made it easier to steal music, and there’s a movement that was started by geeks that sort of says copyright infringement “isn’t theft”, and that the RIAA are vicious corpratist organizations, and that musicians should “get a real job”.
I wouldn’t say consumers “are stupid”. They just don’t like what you like.
I am under the age of 30 and so are my friends. We all love satellite radio. On the contrary, the older people in my family do not have ang do not care about satellite radio, although a few of them are beginning to warm up to it.
We made number one in something, “CEO Gaffes” Maybe this is a start!!!
Thus, as an admitted expert in ill-advised statements, here are my top five picks for the year’s biggest CEO gaffes.
1. Sirius XM (Nasdaq: SIRI) CEO Mel Karmazin
“The pending merger with XM will offer unprecedented choice for consumers and create tremendous value for stockholders,” the satellite radio helmsman said in February, during the company’s fourth quarter earnings report.
I guess we’re 0 for 2 on that front, even though the corporate combination did finally go through. Instead of “unprecedented choice,” the company killed several stations last month as part of the consolidation process. Instead of “tremendous value,” stockholders have seen their shares plummet by 96% since Karmazin uttered those words.
vaporgold
Most here pined for the merger, many to the point of selling their personal integrity down the crapper to support something they knew was not in the public’s best interests, but were willing opine in it’s favor in exchange for the implied financial payday with Karmazin. But, in the end. You ended up with fewer choices at the same price point.
You have a la carte pricing available, but only if you purchase a user terminal at twice the price of the same unit purchased with a “best of programming package”.
The Golden Age of Satellite Radio died the day the merger was approved, along with most shareholders portfolio values.
Shareholders of these companies have no one to blame but themselves. You sold your personal integrity in exchange for a “implied promise” of a financial payday.
But, when it was all said and done. Your “financial saviour” threw you under the bus, and then called you “unsophisticated”. Quite the reward for the selling of your souls.
You can always replace lost money. But, it is impossible to replace lost integrity.
Each day Satellite Radio continues to evolve more towards “terrestrial radio”. More “cross-channel promotions” on “commercial free” stations.
In the end. I personally believe that a BK is the only way out. Satellite Radio’s subscriber accounting system is little more than a “Ponzi Scheme.
And so it goes,
PCSTEL
PCSTEL..
I think you spent to much time under the Xmas tree smoking wacky weed and then decide to post.
I have not lost my integrity, and I don’t think any investors on this site has lost their integrity.
Every investor in any and every company invests for a ROI period.
If we believe what you have posted,then according to you every investor acrossed America has lost their integrity.
Put down that pipe and come back to reality
imho
vaporgold
You don’t have to “believe” what I posted. You can only answer those questions privately within your own consciousness. How many comments in support of the merger did you file with the FCC? How many of those were submitted on behalf of other fictional and/or non-fictional people? It appears to me that KARMA has come to pay you a visit. Just remember, when KARMA comes knockin’ at you front door. You better open it up and invite it in and set up the guest room for it’s visit. Because if you make it set up camp out back by the garbage cans. It only makes to angrier.
Happy Holidays.
And so it goes,
PCSTEL
JRT,
Your points are all very insightful. I directed my angst in the wrong direction. It is the U.S. government, the NAB, the DOJ, the FCC, terrestrial radio (and the RIAA), and the dumb asses everywhere, regardless of their age that I abhor. The younger generation rocks, man! Are you down with that? – Steve O, the “cradle roberer”
So does this mean it “curtains” for Sirius/XM?
How long after BK is announced will broadcasting cease?
(XM subscriber since Feb 02 & Sirius stockholder since Feb 06)
I’m totally bummed out by the way things are going for SiriusXM.
I’ve loved it so much since subscribing(well, BEFORE the merger anyway).
doesn’t mean anything for the product! they will hum right along with a seamless prepackaged bankruptcy. no disruption of service at all.
shareholders and creditors get steam-rolled. mel & company get a nice clean balance sheet and a set of shiny new investors.
I sure hope you’re right. Like other some posters,I don’t think any stone should be unturned for marketing purposes but these “suits” have done a lousy job of marketing this product and focusing on mostly pre-“Boomers”. My main motivation WAY back in 2002(when the Gen 1 SkyFi went down to $150 for two days at Circut City) was for all the GREAT music channels and terra radio had just become sooooo shitty. Even back then all the ads I recall were on VH-1,and a smattering of football games. None in Time,Newsweek,WSJ,Sunday morning news shows, etc. that I am aware of. I got 3 or 4 guys in my reserve unit to subscribe because they drove over an hour to drill & other military duty like myself. That was TOTAL word of mouth. How many other guys got their buddies to do the same across the country? That cost XM NADA!!! In fact If I recall correctly all of the guys I know got SatRad because someone else had one and not because it came in their new car. All the radios that the guys got I can think of were aftermarket units (most portable like mine). I still use my original SkyFi because it is convertable and I switch from car to car,office and even a portable “boom-box” if I have the need to.
Not about to buy a new one because of the state of the company. If it was solid I would’ve bought an Inno some time back.
Make a simple system available to the wide market of “Boomers” & older that they can use in a number of environments. Seems to be working for The “Jitterbug” cell phone. I’ve seen way more “Jitterbug” ads on TV and print(not just AARP either) than I’ve ever seen for SatRad.
This management team is just terrible and maybe it needs to fail so that new blood could come in.
Fire Mel, Greenstein(Chief Programming Exec) and others and bring back some of the XM management they let go or resigned like Hugh Panero.
Robberer
im 26 and i listen to sat rad religiously, trust me there are 20 something’s who listen, usually the few 20 soemthing’s who actually buy a new car, the problem is most 20 year olds still live with mommy and wouldnt be able to afford sat rad unless mommy buys it.
socal, vapor, s-hope, regan, cos, gis, sxmi, tyler, john (163888), brandon, king charles and all else who have added to the great dialogue here . . . many thanks!
Merry Christmas . . . Happy Holidays!
Don’t start dwelling on a BK…the company has funds to keep debt paid. NO court would allow a bk at this stage. They will be forced to negotiate new terms with debt holders. Besides the assets are numerous and not in jeopardy. KEEP the faith fellow shareholders.
S-Hope . . . things are looking really bleak right now. Do you have any feeling or have you read anything on what the asset values are?
Merry Christmas to everyone on this board and your families!!!
Was hoping for a pop today on low volume, but no such luck.
Would have been better off waiting for the Great Pumpkin!! Out in the pumpkin patch. 🙂
Seasons Greetings!!
Dread. You are too damn funny. A Charlie Brown line.
Merry Christmas!
Just trying to keep up our spirits during this train wreck.
Hope you had a great holiday SRF!!!
I am 20 years old and I love listening to sirius xm, however I am one of the few people I know who subs to the service. The problem is with the younger crowd is most of them simply don’t have the extra coin right now. Especially in my state which is michigan, It is so depressing around here and it has been that way for a while, no one has extra money for anything.I got one of my friends to buy 2k shares a week before the merger as i bought 35k shares and well lets say I lost all of my hard earned savings at this point. I am holding and trying to be positive about the stock, we shall see. merry xmas and good luck to all…we are in this together.
For those who did not see this yet.
Dec 24 (Reuters) – Short interest on the Nasdaq fell 3.3 percent in
mid-December, the exchange said on Wednesday, suggesting a decrease in bearish
sentiment in the stock market. For story please see [ID:nWNA3107].
Below are the five Nasdaq stocks that experienced the largest increases and
decreases in their short positions from late-November to mid-December, according
to information released by the exchange.
The five companies with the largest overall short positions are also listed.
The latest date is as of Dec. 15, while the previous period’s data is as of
Nov. 28.
COMPANY Dec. 15 Nov. 28 NET CHANGE PCT CHANGE
—————————————————————————–
FIVE BIGGEST INCREASES:
Clearwire Corp (CLWRD.O: Quote, Profile, Research) 14,741,924 0 14,741,924 0%
Dell Inc (DELL.O: Quote, Profile, Research) 52,175,537 44,201,119 7,974,418 18.04%
Intel Corp (INTC.O: Quote, Profile, Research) 98,595,636 93,321,145 5,274,491 5.65%
Jack In The Box Inc (JACK.O: Quote, Profile, Research) 5,215,367 0 5,215,367 0%
Juniper Networks (JNPR.O: Quote, Profile, Research) 24,270,718 19,333,915 4,936,803 25.53%
FIVE BIGGEST DECREASES:
Life Technologies (LIFE.O: Quote, Profile, Research) 6,445,185 24,801,163 -18,355,978 -74.01%
Comcast Corp (CMCSA.O: Quote, Profile, Research) 78,264,305 96,074,740 -17,810,435 -18.54%
Level 3 Comm. (LVLT.O: Quote, Profile, Research) 200,967,827 215,013,999 -14,046,172 -6.53%
Oracle Corp (ORCL.O: Quote, Profile, Research) 47,917,795 57,646,941 -9,729,146 -16.88%
Charter Comm. (CHTR.O: Quote, Profile, Research) 63,060,536 70,249,433 -7,188,897 -10.23%
FIVE BIGGEST POSITIONS:
Sirius XM Radio (SIRI.O: Quote, Profile, Research) 263,767,753 263,151,674 616,079 0.23%
Level 3 Communications 200,967,827 215,013,999 -14,046,172 -6.53%
Intel Corp 98,595,636 93,321,145 5,274,491 5.65%
E*TRADE Financial (ETFC.O: Quote, Profile, Research) 95,228,348 95,570,246 -341,898 -0.36%
Comcast Corp (CMCSA.O: Quote, Profile, Research) 78,264,305 96,074,740 -17,810,435 -18.54%
Source: Nasdaq data as of Dec. 15, Reuters Estimates
(Reporting by Phil Wahba)
Here’s a positive spin on the BK talk.
Maybe, just maybe Sirius is getting the word out that they may BK so their lenders (current) will be more flexible in any future financing arrangements/extensions. We have to think that, do banks really want to be dealing with one more BK company?
The expenses alone for all parties would be incredible if BK were declared.
If lenders restructure without all of the added headaches/expenses that BK would add why not do it. Let’s get real, the company isn’t going anywhere BK or not.
Sirius Xm is a great product that appeals to kids to grandparents. The problem with this great product (besides our current economy)is the lack of knowledge about this product to the masses. It’s still the best kept secret in entertainment period. Know is not the time to be defensive in spending on advertising. They missed the boat on X-mass which is ashame. I’ve said this over & over but they need to reach out to the under 35 crowd. The little advertising they do is geared for 30 & over. Steve Jobs took the I-Pod and labeled it cool by giving it an image for the younger generation. Now the young people have turned on us older people to the I-Pod. The under 35 crowd love their music and are more open to new music. The good news is Sirius Xm offers a clethera of all types of new music to be discovered by all ages. If I had a vote on what to cut back on it sure would not be marketing. They need to believe more in their own product. Go after the after market installs. The I-Pod doesn’t even come as standard equipment in any car let alone an option. Why else would most Sirius Xm fans own so much stock. Get the product out in the open sunlight and the hell out of the closet. It’s a fanastic product it’s just too bad Sirius Xm doesn’t know it!
One more thought. Mel go with your gut instincts and spend on marketing and create ea new younger image. You seem to be lending your ear to your bean counters. Remember they can tell you how not to spend money until you have no money to spend. No matter the economic climate it still does not change one thing, you always have to spend money to make money or else you might as well pack up your tent and go home.
Roadkill. Check out that NYTimes article regarding Mel. They are softening up the public for the train wreck that is going to happen to shareholders. Which in my opinion already happened at .12. Mel sure can change his tune faster than a Tiaquana Taco Vendor.
dagnamit socal . . . you’re ahead of me again brother. Just posted a quote from that same article in reply to your quiz answer of who resides at 1230 Avenue of the Americas (see above).
This ain’t good … Do you think he will roll-over the remaining convertible balance with Goldman? He could still exchange debt for equity with the newly minted shares . ..
I think May is where the default is coming. Shareholders should start doing due diligence on hard asset values (spectrum, dc building etc) in anticipation of the filing; These always get low-balled by the debtor
Naw Roadkill,
You broke the pre bankruptcy story first. Mel is singing a MUCH different tune than he chirped just a few short months ago.
Blame Blame Blame. That’s all I read regarding his statements.
No Victims…………Only VOLUNTEERS!!!!!!!!!
Sorry guys.
I bought 10,000 shares last week, so the Moody’s rating and the potential bankruptcy is my fault. Every single solitary time I buy, the next piece of terrible news comes out and the stock drops by at least half.
I may have now sealed all of our fates with my final purchase.
TYLER, ANY COMMENTS ON HOW THIS WILL IMPACT US SHORT TERM? Will it kill potential refi? Is bk more in play now?
Free lifetime subscription to SiriusBuzz Radio for the first person who can provide the correct attribution for the following quote:
“SIRIUS XM should not have a problem refinancing any of this debt. So what does it mean to shareholders? It should mean nothing! That’s right, absolutely NOTHING! As the old converts are paid off, the existing short positions are covered, and the shares returned. The replacing converts (assuming this is the debt instrument chosen at that time) short against the new. The net effect is a zero-sum-game. The new shares used a few weeks ago for arbitrage purposes was for new debt. Refinancing these old convertibles, as Martha Stewart would say, is a good thing, and shouldn’t result in any dilution of shares. In the end, it will not matter if 600 million needs refinancing or 6 billion.”
I wasn’t around then, but I heard someone quote a similar post from Brandon?
Socal . . . you are on your game! Correct!
Please contact King Charles about claiming your free lifetime SiriusBuzz radio subscription … which should probably run through May ’09 when Mel defaults on the XM bank loan, unless his March 1st announcement is a prepackaged bankruptcy (or as the gentile management types like to say, “reorganization”) … the only “Buzz” being heard after that is Mel throwing the switch on the shareholder electric chair.
Damn your post was funnier than shit!!
I was irritated I missed the first one, so I’m damn glad I got the second one!!!!!
Thanks for the quiz, the damn boards been like a morgue around here.
BUZZ and the electric chair. That is a friggen all time poster classic!!!!!!
Along with everything else. Why not throw in a Middle East crisis too!!!!!!!!
Tyler,
I am confused by all of the “potential bankruptcy” talk. I understand that there is 193 million of Sirius debt due in Feb. Sirius can pay this off with either cash on hand or if they chose not to strain their cash position, issue stock (1.5 billion shares at 0.13/share would do it). Now all you have left is the XM debt which starts to mature in May 2009. By then you will have Q1 results and possibly/hopefully better liquidity in the financing markets. If Mel cannot get an acceptable deal by May, can he bankrupt XM only, which I understand is structured as a subsidiary of Sirius? Has Sirius guaranteed any of the XM debt due in 2009? If Mel BK’s XM only, what impact do you think that this would have on Sirius and the Sirius XM shareholders?
Paul
Hey Paul . . . good questions. Take a look at this language from the debt offering document of July 29, 2008:
“An inability to access additional sources of liquidity to fund cash needs in 2009 or thereafter or to refinance or otherwise fund the repayment of maturing debt instruments could adversely affect the growth, financial condition, and results of operations of both XM and Sirius, and their ability to make payments on their debt, and could force either or both companies to seek the protection of the bankruptcy laws, which could materially adversely impact their ability to operate their business and to make payments under their debt instruments, including the Notes offered
hereby.
Tyler, Paul brings up an interesting question. If that is possible wouldn’t they lose the Xm satellite radio band?
Neal,
I am not exactly sure how a Chapter 11 bankruptcy works, but I believe that the debtor would continue to operate its business while having an automatic stay placed on its creditors. If the XM subsidiary was to file for chapter 11, it would provide them with time to set forth a plan of reorganization, stretching out the payment of the $783 million in 2009 debt over an extended period of time while maintaining control of the spectrum and the business. Once the bankruptcy court approves the plan, the debtor can emerge from chapter 11 and continue to operate per the approve reorganization plan. If this is correct, what I am not sure about is how this would effect the parent, Sirius XM and ultimately, us, the shareholders.
Paul
wow, if sirius is going bankrupt, then so is every other start up who is in debt, which would mean that losing sirius is only the start of our problems, anyone up for begging for some bread. socal and roadkill couldnt be anymore wrong, but i cant convince em of that nor would i care too, ill keep sirius too myself. you guys can go ahead and sell off in anticipation of “bankruptcy” id rather lose all these buyers who get negative as soon as things dont go the way they planned. tell me who this comment is from and u can win nothing. “I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.” You bitches are fearful, and that makes me greedy :O