Satellite radio provider SiriusXM has doubled the sized of its senior bond offering following strong institutional investor demand.
The company had initially planned to sell US$750m of notes but subsequently upped this to US$1.5bn. The 10-year unsecured…
Satellite radio provider SiriusXM has doubled the sized of its senior bond offering following strong institutional investor demand.
The company had initially planned to sell US$750m of notes but subsequently upped this to US$1.5bn. The 10-year unsecured notes, which were issued via subsidiary Sirius XM Radio Inc, bear an interest of 6% and priced at par.
Relationship bank JP Morgan was the left lead on the deal with Barclays, Citigroup, Deutsche Bank, Morgan Stanley and SunTrust Robinson Humphrey bookrunning managers.
Proceeds are expected to be used repay debt and fund further share repurchases. More specifically, SiriusXM is planning on repaying the US$730m outstanding under its US$1.25bn senior secured revolving credit facility.
As of 31 March 2014, SiriusXM had a leverage of 3.5 times debt-to-EBITDA, up from 2.8x a year earlier. The increase reflects the pressure from shareholders, notably majority owner Liberty Media, to raise more debt in order to return cash to shareholders.
Since the beginning of 2013, the company increased funded debt balances by US$1.4bn and repurchased roughly US$2.3bn of common stock on the open market under its US$4bn common share repurchase program.
In April 2014, SiriusXM funded US$340m in share repurchases and completed the US$500m programme to buy back a portion of shares owned by Liberty.
That Liberty by buyback had been put on hold at the beginning of this year after the company announced a proposal to takeover SiriusXM in an all-share tax-free transaction. However, it pulled the plan in March, instead carrying out a tracking stock distribution, and the share repurchase agreement was completed.
