UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 16, 2021 (
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Item 1.01 Entry into a Material Definitive Agreement
On August 16, 2021, our subsidiary, Sirius XM Radio Inc. (“SiriusXM”), issued $1.0 billion aggregate principal amount of 3.125% Senior Notes due 2026 (the “2026 Notes”) and $1.5 billion aggregate principal amount of 3.875% Senior Notes due 2031 (the “2031 Notes” and together with the 2026 Notes, the “Notes”). The Notes were sold to Citigroup Global Markets Inc., BofA Securities, Inc., Barclays Capital Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, BMO Capital Markets Corp., BNP Paribas Securities Corp., Credit Agricole Securities (USA) Inc., Goldman Sachs & Co. LLC, Mizuho Securities USA LLC, RBC Capital Markets LLC, Scotia Capital (USA) Inc., Truist Securities, Inc., U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC. The Notes were resold to certain non-U.S. persons pursuant to Regulation S under the Securities Act of 1933, as amended (the “Securities Act”), and to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act at a purchase price equal to 100% of their principal amount. The terms of the 2026 Notes are governed by an Indenture, dated as of August 16, 2021, among SiriusXM, the guarantors named therein and U.S. Bank National Association, as trustee (the “2026 Notes Indenture”) and the terms of the 2031 Notes are governed by an Indenture, dated as of August 16, 2021, among SiriusXM, the guarantors named therein and U.S. Bank National Association, as trustee (the “2031 Indenture” and together with the 2026 Indenture, the “Indentures”). The following summary is not a complete description of all of the terms of the Indentures or the Notes and is qualified in its entirety by the copies of the Indentures which are attached as Exhibit 4.1 and Exhibit 4.2 and incorporated herein by reference.
Interest and maturity. Interest on the 2026 Notes is payable semi-annually in arrears on March 1 and September 1 at a rate of 3.125% per annum, commencing on March 1, 2022. The 2026 Notes will mature on September 1, 2026. Interest on the 2031 Notes is payable semi-annually in arrears on March 1 and September 1 at a rate of 3.875% per annum, commencing on March 1, 2022. The 2031 Notes will mature on September 1, 2031.
Guarantees. SiriusXM’s wholly owned domestic 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 LLC, Pandora Media, LLC, Pandora Media California, LLC, AdsWizz Inc., Stitcher Media LLC and Audios Ventures Inc.– guarantee, on a senior unsecured basis, SiriusXM’s obligations under each series of 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 Indentures. 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 2026 Notes. At any time prior to September 1, 2023, SiriusXM may redeem some or all of the 2026 Notes at any time and from time to time at a “make-whole” redemption price set forth in the 2026 Indenture. On and after September 1, 2023, SiriusXM may redeem the 2026 Notes, in whole or in part, at any time at the redemption prices set forth in the 2026 Indenture. In addition, prior to September 1, 2023, SiriusXM may, on one or more occasions, redeem up to 40% of the aggregate principal amount of the 2026 Notes with the proceeds of certain equity offerings at a redemption price equal to 103.125% of the principal amount of the 2026 Notes redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption.
Optional redemption for the 2031 Notes. At any time prior to September 1, 2026, SiriusXM may redeem some or all of the 2031 Notes at any time and from time to time at a “make-whole” redemption price set forth in the 2031 Indenture. On and after September 1, 2026, SiriusXM may redeem the 2031 Notes, in whole or in part, at any time at the redemption prices set forth in the 2031 Indenture. In addition, prior to September 1, 2024, SiriusXM may, on one or more occasions, redeem up to 40% of the aggregate principal amount of the 2031 Notes with the proceeds of certain equity offerings at a redemption price equal to 103.875% of the principal amount of the 2031 Notes redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption.
Change of control and other restrictive covenants. Each series of Notes is subject to covenants that, among other things, require SiriusXM to make an offer to repurchase the Notes of such series at 101% of their principal amount in the event of a change of control and a downgrade in the ratings of such series of Notes, and limit SiriusXM’s ability and the ability of SiriusXM’s subsidiaries to create certain liens; enter into sale/leaseback transactions; and merge, consolidate or sell or otherwise dispose of all or substantially all assets. In addition, each Indenture restricts SiriusXM’s non-guarantor subsidiaries’ ability to create, assume, incur or guarantee additional indebtedness without such non-guarantor subsidiary guaranteeing each such series of Notes. Sirius XM Holdings Inc. is not subject to these restrictive covenants.
Events of default. The following constitute events of default with respect to each series of Notes: default in the payment of interest; default in the payment of principal; failure to comply with covenants; failure to pay other indebtedness after final maturity or acceleration of other indebtedness exceeding a specified amount; certain events of bankruptcy; a judgment for payment of money exceeding a specified aggregate amount; and voidance of subsidiary guarantees, in each case subject to applicable grace periods.
Use of proceeds. SiriusXM intends to use the net proceeds from the issuance of the Notes, together with cash on hand and borrowings under its senior secured credit facility, to redeem all $1.0 billion of its outstanding 5.375% Senior Notes due 2026 at a redemption price of 102.688% of the
principal amount thereof plus accrued and unpaid interest thereon to, but excluding, the redemption date of September 2, 2021, and all $1.5 billion of its outstanding 4.625% Senior Notes due 2024 at a redemption price of 102.313% of the principal amount thereof plus accrued and unpaid interest thereon to, but excluding, the redemption date of August 16, 2021.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The response to Item 1.01 is hereby incorporated by reference into this Item 2.03.
Item 8.01 Other Events
On August 16, 2021, SiriusXM completed the redemption of all $1.5 billion aggregate principal amount of its 4.625% Senior Notes due 2024 at a redemption price of 102.313% of the principal amount thereof plus accrued and unpaid interest thereon to, but excluding, the redemption date.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SIRIUS XM HOLDINGS INC. | ||
| By: | /s/ Patrick L. Donnelly | |
| Patrick L. Donnelly | ||
| Executive Vice President, General Counsel and Secretary | ||
Dated: August 16, 2021