XM reworks its credit and GM deal - Orbitcast

XM reworks its credit and GM deal

| 11 Comments

XMSRXM Satellite Radio has reworked its credit facility specifically for the Sirius-XM merger, as well as its agreements with General Motors, it was revealed today in an SEC filing.

First, they amended their current $250 million credit facility. Simply put: should the merger be consummated, the facility will continue to be available.

Next up, XM restated and amended their agreement with GM, rolling together the separate distribution and credit agreements. The terms are similar to that of the previous agreements, except for a new minimum pre-marketing cash flow threshold for 2008 that XM will need to meet in order to make draws under the GM credit facility in 2009.

XM has a $150 million credit facility with GM.

[SEC Filing]

11 Comments

Sirius is over paying for XM.
I wonder what would be best for Sirius stock merger or no merger?

Ha. Sirius got the best deal one could imagine with the 4.6 ratio paid XM shareholders. We were screwed hard by this deal.

That said, I don't think this 8k would have happened today unless merger approval was just around the corner.

>>>Stack said: "That said, I don't think this 8k would have happened today unless merger approval was just around the corner."


The first part of the 8-K reworks the $250M credit facility to make the funds available to XM no matter what happens with the merger -- if the merger goes through, then XM (the subsidiary of Sirius) will have access to the cash still.

The second part reworks the GM deal to change the Pre-marketing cash flow threshold levels that XM needs to reach, to have access to the $150M GM facility. The prior levels were $87M in 2006 and $375M in 2007 and thereafter... XM easily surpassed the levels for 2006, but likely fell short for 2007. I suspect the change lowered the threshold level.

I also agree with you... given XM's liquidity and overall better financials, plus the lack of CAPEX needs over the next 5 years (compared to Sirius), XM shareholders really got the short straw in this deal. People that claim that Sirius "overpaid" have not done a very good job studying the financials -- or understand the coming CAPEX needs facing Sirius.


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Gawd yes....XM is bringing the financial responsibility and the fresh technology. Sirius is bringing a high growth rate at high cost and a celebrity CEO. But they also bring a need for new satellites with big CAPEX.

Besides the big expenses for hardware...the programming is getting darned expensive too. Soon negotiations have to start with Howard Stern, and he's going to be expensive to keep, or he'll retire and that will lose a lot of subscribers. The NFL deal has to be renewed, and if you go back to the 2003 SEC filings when that deal was done, theres a whopper balloon payment to the NFL on the order of $ 100 million....and that's due on the OLD NFL contract. Who knows what the new one will cost.

If the merger goes through, look for Mel to make some quick expense cuts and then sell the combined company to a media giant. I think it'll be NBC / Universal or Time Warner, since they don't have any radio now, so the anti-trust is a non issue. I expect it to happen within a year of the merger and before the big expenses in the Sirius hardware and programming become widely known.

The best thing is for the companies to wait until March 1 when they can walk away from this merger, and then announce new pricing. $ 5 per month for music, $ 5 per month for Talk and $ 5 per month for sports. Total new price about $ 15. Plus if the music revenue is only $ 5 each, they can reduce their charges for music to the RIAA a lot.

We will see.

I do not think that xm would go trouugh all the expense and trouble of restructuring for the merger if it did not know something for sure. I definately think it's been approved but not released to the public.
These are just my opinions though.
I hope it's true for all oue sakes. It's been way to long.

I do not think that xm would go trouugh all the expense and trouble of restructuring for the merger if it did not know something for sure. I definately think it's been approved but not released to the public.
These are just my opinions though.
I hope it's true for all oue sakes. It's been way to long.

I do not think that xm would go trouugh all the expense and trouble of restructuring for the merger if it did not know something for sure. I definately think it's been approved but not released to the public.
These are just my opinions though.
I hope it's true for all oue sakes. It's been way to long.

I'm not so sure. If this was merger related you would have expected it back in December. I wonder if some of it is preparation for NO merger. (The merger talk is there, but so is a change in the financials required to use the credit, which might be about going on alone with no merger)

Homer, the XM Shill, is a dreamer suggesting that XM's financial strenght is superior to Sirius. There is absolutely nothing superior about XM as compared to Sirius. XM has greater debt, slower growth, adds about 60% of the subscribers of Sirius.

I frankly hope that the merger is denied if only to watch XM fade into Chapt. 11.

Homer... have you no shame.... you're support of XM is tantamount to Bush believing that he's a good President.

Anonymous Coward (aka Plowboymatt) said:
>>>XM has greater debt, slower growth, adds about 60% of the subscribers of Sirius.

As of 9/30/07:
Sirius LTDebt - $1.281 billion (47% of the debt between the two)
XM LTDebt - $1.474 billion (53% of the debt between the two)

That is hardly a significant difference between the two. Furthermore, retail gross additions for the last year have been approximately 54% for Sirius and 46% for Sirius. Again, not a significant difference.

You need to spend less time worring about me -- that you have to go to all of these boards calling me names -- and spend more time doing accurate due diligence.

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