Sirius XM on Monday said it will offer $1 billion in 10-year bonds to redeem previous debt. The senior notes will be due in 2030.
“The company intends to use the net proceeds from this offering, together with cash on hand, to redeem all of its outstanding 5.375% Senior Notes due 2025 at a redemption price of 102.688% of the principal amount thereof plus accrued and unpaid interest thereon to, but excluding, the redemption date,” Sirius said in its announcement.
Sirius XM’s stock price was up 0.5% in early-morning trading on Monday to $6.54 per share. The company, after dropping below $4.50 per share in early April, has seen its stock price increase 47% in the last two months.
The company, which is home to Howard Stern and features hundreds of radio channels, warned the coronavirus pandemic has “adversely impacted” its business; in particular, Sirius XM said Pandora, the music streaming service it bought in 2018, had seen a noticeable dip in advertisers — like many other businesses — due to the pandemic. Sirius XM said the last few weeks have been better for Pandora and its radio business, though, after initially seeing ad revenue “markedly” decrease after stay-at-home orders were implemented in mid-March.
Combined, Sirius XM and Pandora reach more than 100 million customers each month.
“We believe that we have sufficient cash and cash equivalents, as well as debt capacity, to cover our estimated short-term and long-term funding needs, including amounts to construct, launch and insure replacement satellites and strategic opportunities,” Sirius added in its SEC filing. “As of June 5, 2020, we had approximately $224.6 million of cash on hand and $1,749 million was available for future borrowing under our revolving credit facility (after giving effect to outstanding letters of credit).”