Sirius XM looking to raise a half billion bucks, plus change
With the much improved bond markets, Sirius XM CEO Mel Karmazin is returning yet again to refinance some of the company’s debt and push out maturities. This time the satellite radio company is looking to raise $550 million.
The sale of the new Senior Notes due 2015 will be only to qualified institutional investors. The proceeds from the offering will be used to redeem all of Sirius Satellite Radio’s 9 & 5/8% Senior Notes due 2013, thus extending the due date for that chunk of debt by two years.
RBR-TVBR observation: Sirius XM has three bond issues due in 2013. This refi will cut the $1.8 billion due that year to $1.3 billion. Once this deal is done, we would expect to see Mel work to refi some of the remainder as well (two bond issues by the pre-merger XM) to spread the company’s debt maturities out more evenly over the coming years.
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At $7 a month he could probably sign up and retain 3x the current number of customers, with little increase in variable costs. If he doesn't do this, another (and final) bankruptcy seems inevitable.
Who is going to be dumb enough to invest $550 million in Sirius with their current business plan?
Answer one question , by what measure is Pandora free? Currently you either use a smartphone with a data plan , which is free ? not. Pioneer offers a nice $1200 option which stream Pandora and you still will need a mobile ISP to receive the aforementioned Free Pandora product. BTW that $1200 could buy two SIRI/XM receivers with lifetime subs. Final point , if you want the best quality Pandora , you will find that it comes a monthly fee just like SIRI/XM. SIRIUS does offer a mostly music sub for the magical $7 price .
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