By Paul Deckelman
New York, Oct. 13 - XM Satellite Radio Inc. priced an upsized $700 million offering of eight-year senior notes (B3/CCC+) on Wednesday at par to yield 7 5/8%, according to high yield syndicate sources.
The quick-to-market deal priced at the wide end of price talk in the area of 7½%. It was increased from the originally announced $550 million.
J.P. Morgan Securities LLC was the bookrunner for the issue.
Morgan Stanley & Co. Inc., Bank of America Merrill Lynch and UBS Investment Bank participated in the offering as co-managers.
The Rule 144A/Regulation S notes have call protection for the first four years issue, the sources said.
XM Satellite Radio - a subsidiary of New York-based satellite broadcaster Sirius XM Radio Inc. - plans to use the net proceeds from the offering to repurchase its roughly $526 million of outstanding 11¼% senior secured notes due 2013. The notes would be bought back via a tender offer and related consent solicitation which the company separately announced on Wednesday. Remaining proceeds would go towards general corporate purposes, which could include debt repayment.
| Issuer: | XM Satellite Radio Inc.
|
| Amount: | $700 million (upsized from original $550 million)
|
| Maturity: | Nov. 1, 2018
|
| Securities: | Senior notes
|
| Bookrunner: | J.P. Morgan Securities LLC
|
| Co-managers: | Morgan Stanley & Co. Inc., Bank of America Merrill Lynch and UBS Investment Bank
|
| Coupon: | 7 5/8%
|
| Price: | Par
|
| Yield: | 7 5/8%
|
| Spread: | 562 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Nov. 1, 2014, then callable on or after Nov. 1, 2014 at 103.813, on or after Nov. 1, 2015 at 101.906 and on or after Nov. 1, 2016 at par
|
| Equity clawback: | 35% of issue at 107.625 until Nov. 1, 2013
|
| Change-of-control put: | 101%
|
| Trade date: | Oct. 13
|
| Settlement date: | Oct. 27 (T+10)
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: CCC+
|
| Distribution: | Rule 144A /Reg. S
|
| Price talk: | 7½% area
|
| Marketing: | Quick to market
|
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