SiriusXM gets $1.1 billion financing commitment with proposed merger

By Sara Rosenberg

New York, Dec. 12 – SiriusXM Holdings Inc. has received a commitment for up to $1.1 billion in financing to support the combination of Liberty Media Corp.’s Liberty SiriusXM tracking stock group and SiriusXM to create a new public company, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

Morgan Stanley, Bank of America and JPMorgan provided the financing commitment.

Proceeds may be used to refinance Liberty Media’s 2.75% exchangeable notes due 2049 and the existing Liberty Media margin loan secured by SiriusXM’s common stock.

Pro forma net leverage is expected to be 3.9x at close. The company’s long-term target leverage ratio is low-to-mid 3x adjusted EBITDA.

Under the terms of the transaction, Liberty will separate Liberty SiriusXM tracking stock group by means of a redemptive split-off of a new subsidiary of Liberty (SplitCo), which will hold its shares of SiriusXM and about $1.7 billion of estimated attributed net liabilities. In the split-off, holders of each series of Liberty SiriusXM common stock will receive a number of shares of SplitCo stock equal to an exchange ratio.

At closing, former Liberty SiriusXM stockholders will own about 81% of the combined company and SiriusXM minority stockholders will own the remaining 19%.

Closing is expected early in the third quarter of 2024, subject to Liberty SiriusXM stockholder approval and regulatory approvals.

SiriusXM is a New York-based audio entertainment company. Liberty is an Englewood, Colo.-based owner of media, communications and entertainment businesses. The combined company will continue to operate under the SiriusXM name and brand.

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