Sirius XM To Pay Off $186 Million In Debt
“Our strong cash position and growing free cash flow profile have put us in a position to retire these notes three years ahead of their maturity, at the first available redemption date,” said David Frear, Executive Vice President and Chief Financial Officer, SiriusXM. “The early retirement of these notes will reduce interest expense and eliminate the only remaining piece of secured debt on our balance sheet.”
The big news in this is that Sirius XM is secure enough in its cash position to make such a move. In addition, this will wipe out secured debt that the company has, meaning that going forward the company debt is not secured by Sirius XM. Repayment of debt is one event that many Sirius XM investors want to see happen, so the news should be well received by the street.
Liberty Media (NASDAQ:LMCA), the company vying for control of Sirius XM, has about $50 million of this debt on its books which represents about 27% of these notes. Prior to this announcement, Liberty held roughly $330 million of Sirius XM’s debt. The repayment will deliver a healthy wad of cash to Liberty Media, while at the same time allowing the debt ratio at Sirius XM to approach Karmazin’s desired 3 to 1.