SIRIUS XM HOLDINGS INC. (NASDAQ:SIRI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement
On July 2, 2019, our subsidiary, Sirius XM Radio Inc. (“SiriusXM”), issued $1.5 billion aggregate principal amount of 4.625% Senior Notes due 2024 (the “Notes”). The Notes were sold to J.P. Morgan Securities LLC, Barclays Capital Inc., Citigroup Global Markets Inc., BofA Securities, Inc., BMO Capital Markets Corp., BNP Paribas Securities Corp., Credit Agricole Securities (USA) Inc., Goldman Sachs & Co. LLC, Mizuho Securities USA LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, SunTrust Robinson Humphrey, Inc., Scotia Capital (USA) Inc., U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC. The Notes were resold to certain non-U.S. persons to Regulation S under the Securities Act of 1933, as amended (the “Securities Act”), and to qualified institutional buyers to Rule 144A under the Securities Act at a purchase price equal to 50% of their principal amount. The terms of the Notes are governed by an Indenture, dated as of July 2, 2019, among SiriusXM, the guarantors named therein and U.S. Bank National Association, as trustee (the “Indenture”). The following summary is not a complete description of all of the terms of the Indenture or the Notes and is qualified in its entirety by the copy of the Indenture which is attached as Exhibit 4.1 and incorporated herein by reference.
Interest and maturity. Interest on the Notes is payable semi-annually in arrears on January 15 and July 15 at a rate of 4.625% per annum, commencing on January 15, 2020. The Notes will mature on July 15, 2024.
Guarantees. SiriusXM’s wholly owned subsidiaries – Satellite CD Radio LLC, Sirius XM Connected Vehicle Services Inc., Sirius XM Connected Vehicle Services Holdings Inc., XM eMall Inc., XM Radio LLC, XM Investment LLC, XM 1500 Eckington LLC, Automatic Labs Inc., Pandora Media, LLC, Pandora Media California, LLC and AdsWizz Inc. – guarantee, on a senior unsecured basis, SiriusXM’s obligations under the Notes, including the payment of principal and interest. These guarantors also guarantee SiriusXM’s senior secured revolving credit facility and existing senior notes. One or more of SiriusXM’s other subsidiaries may, in the future, be required to guarantee SiriusXM’s other indebtedness, but may not be required to guarantee the Notes except as provided in the Indenture. Sirius XM Holdings Inc. does not guarantee the Notes but does guarantee the payment and performance obligations of Pandora Media, LLC under its existing convertible senior notes.
Ranking. The Notes are SiriusXM’s general unsecured senior obligations. The Notes and related guarantees rank equally in right of payment with all of SiriusXM’s and the guarantors’ existing and future senior indebtedness and senior in right of payment to all of SiriusXM’s and the guarantors’ future subordinated obligations. The Notes and related guarantees are structurally subordinated in right of payment to all existing and future liabilities (including trade payables) of SiriusXM’s non-guarantor subsidiaries. The Notes and related guarantees are effectively subordinated to all of SiriusXM’s existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness.
Optional redemption for the Notes. At any time prior to July 15, 2021, SiriusXM may redeem some or all of the Notes at any time and from time to time at a “make-whole” redemption price set forth in the Indenture. On and after July 15, 2021, SiriusXM may redeem the Notes, in
