Thursday, June 07, 2007

Sirius gets fed from the table by Morgan Stanley

New York — Sirius Satellite Radio reports it has obtained a $250 million senior secured term loan commitment from Morgan Stanley Senior Funding.
The facility will mature in 5.5 years and have covenants substantially similar to those under the company's existing 9 5/8 percent Senior Notes. The proceeds will be used for general corporate purposes, Sirius said.
Morgan Stanley is acting as the sole lead arranger and has committed to provide the entire principal amount of the facility, subject to customary closing conditions. “This transaction takes advantage of favorable market conditions and significantly strengthens our balance sheet,” said David Frear, executive VP/chief financial officer of Sirius.
Sirius said in a statement that it believes that its merger with XM Satellite Radio will close by the end of 2007.

Translation: "general corporate purposes" = "pay the bills, since our subscription revenue isn't quite enough."

Remember, for regular people, getting another credit card when you're a little short is bad, but a company securing additional financing when they're a little short is good.*

I'm still skeptical about the XM/Sirius merger actually coming together, by the way.

*Until the party comes to a stop, that is.

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