Karmazin Says Sirius XM Took 'Ugly' Debt Deal To Close
August 15, 2008 at 5:34 AM (PT)
SIRIUS XM RADIO CEO MEL KARMAZIN says that in order to close the company's merger as quickly as possible before broadcasters could get an injunction to block the transaction, he had to make an "ugly" debt deal with unfavorable refinancing terms.
KARMAZIN tells BLOOMBERG NEWS that he "hated" the bond sale that raised $550 million to close the deal. "It was unfortunate, but we did it ... My choice at 7:15 MONDAY night was take the deal that was on the table, or wait," KARMAZIN says, adding, "There could have been a scenario where the deal didn't happen." The deal on the table set a 7% interest rate for an offering of XM SATELLITE RADIO senior subordinated securities due DECEMBER 2014, convertible into SIRIUS XM common stock at an initial price of $1.875/share.
The company's stock has dropped 24% since the JULY 28th bond sale.