The Liberty infusion is in the form of loans directly to SIRIUS XM and that Company's subsidiaries, for which Liberty will also receive an equity interest in the operations. There are two phases to the investment, with the first step resulting in a $280 senior secured loan, $250 of which was immediately funded. SIRIUS XM is going to use that infusion to repay $171.6 million of the Company's maturing 2-12/ percent Convertible Notes due on February 17th. General corporate use is designated for any remaining monies, such as transaction expenses and to have some cash available as working capital. Maturing in December of 2012, this loan has an interest rate of 15 percent and is asset secured. The second loan will be for an additional $150 million and will fund SIRIUS XM's wholly owned subsidiary, XM Satellite Radio. Liberty has also agreed the Company will purchase as much as $100 million of XM Satellite Radio's outstanding loans. When the second phase is completed, SIRIUS XM will assign preferred stock convertible into 40 percent of the Company's common stock, an aggregate of 12.5 million shares. Seats on SIRIUS XM's Board of Directors will also be awarded to Liberty, directly proportionate to the equity ownership, with expectations of Liberty's John Malone and Greg Maffei to take those seats. Liberty also stated that this investment is going to be attributed to the Liberty Capital group. The investment is not expected to affect the timing of the upcoming split-off of some of Liberty Entertainment.
Satnews Daily
February 17th, 2009
Lifeline Tossed To SIRIUS By Liberty Media
The Liberty infusion is in the form of loans directly to SIRIUS XM and that Company's subsidiaries, for which Liberty will also receive an equity interest in the operations. There are two phases to the investment, with the first step resulting in a $280 senior secured loan, $250 of which was immediately funded. SIRIUS XM is going to use that infusion to repay $171.6 million of the Company's maturing 2-12/ percent Convertible Notes due on February 17th. General corporate use is designated for any remaining monies, such as transaction expenses and to have some cash available as working capital. Maturing in December of 2012, this loan has an interest rate of 15 percent and is asset secured. The second loan will be for an additional $150 million and will fund SIRIUS XM's wholly owned subsidiary, XM Satellite Radio. Liberty has also agreed the Company will purchase as much as $100 million of XM Satellite Radio's outstanding loans. When the second phase is completed, SIRIUS XM will assign preferred stock convertible into 40 percent of the Company's common stock, an aggregate of 12.5 million shares. Seats on SIRIUS XM's Board of Directors will also be awarded to Liberty, directly proportionate to the equity ownership, with expectations of Liberty's John Malone and Greg Maffei to take those seats. Liberty also stated that this investment is going to be attributed to the Liberty Capital group. The investment is not expected to affect the timing of the upcoming split-off of some of Liberty Entertainment.