Published on 5/1/2014 in the Prospect News High Yield Daily.
New Issue: Sirius XM sells upsized $1.5 billion 10-year notes at par to yield 6%
By Paul Deckelman
New York, May 1 - Sirius XM Radio, Inc., a New York-based satellite radio broadcaster, priced an upsized $1.5 billion of 10-year senior notes (B1/BB) on Thursday.
High-yield syndicate sources said the quick-to-market offering was doubled in size from the $750 million originally announced just hours earlier.
The notes priced at par to yield 6%, coming at the wide end of pre-deal market price talk of 5 7/8% to 6%.
The offering was brought to market via joint bookrunners J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Citigroup Global Markets Inc., BofA Merrill Lynch, Morgan Stanley & Co. LLC and SunTrust Robinson Humphrey Inc.
The deal was marketed to potential investors via a morning conference call, followed by the afternoon pricing.
The notes, being sold under Rule 144A and Regulation S without registration rights, will have five years of call protection, as well as a standard equity clawback provision and 101% change-of-control put provision.
The company plans to use the net proceeds from the debt sale for general corporate purposes, which could include the repayment or repurchase of its senior or subordinated debt and revolving credit debt, as well as for funding dividends to corporate parent Sirius XM Holdings Inc. to fund share repurchases of the company's common stock. The company plans to hold the proceeds as cash on its balance sheet pending any such use of the proceeds.
| Issuer: | Sirius XM Radio Inc., subsidiary of Sirius XM Holdings Inc.
|
| Amount: | $1.5 billion, upsized from $750 million
|
| Expected net proceeds: | $1,481,000,000
|
| Maturity: | July 15, 2024
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| Securities: | Senior notes
|
| Joint bookrunners: | J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Citigroup Global Markets Inc., BofA Merrill Lynch, Morgan Stanley & Co. LLC, SunTrust Robinson Humphrey Inc.
|
| Co-managers: | BMO Capital Markets Corp., BNP Paribas Securities Corp., Credit Agricole Securities (USA) Inc., RBC Capital Markets, LLC, RBS Securities Inc., U.S. Bancorp Investments Inc., Wells Fargo Securities LLC
|
| Coupon: | 6%
|
| Price: | par
|
| Yield to worst | 6%
|
| Spread | 340 bps over 2.75% Treasuries due Feb. 15, 2024
|
| Call protection: | Non-callable until July 15, 2019, then callable at 103, 102, 101 and finally at par on or after July 15, 2022
|
| Make-whole call: | Treasuries plus 50 bps until July 15, 2019
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| Equity clawback: | For up to 35% of issue at 106 until July 15, 2017
|
| Change-of-control put: | 101%
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| Trade date: | May 1
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| Settlement date: | May 6 (T+3)
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| Ratings: | Moody's: B1
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| Standard & Poor's: BB
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| Distribution: | Rule 144A and Regulation S without registration rights
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| Marketing: | Quick to market
|
| Price talk: | 5 7/8% to 6%
|
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