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): June 21, 2021 (
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| Item 1.01 | Entry into a Material Definitive Agreement |
On June 21, 2021, our subsidiary, Sirius XM Radio Inc. (“SiriusXM”), issued $2.0 billion aggregate principal amount of 4.000% Senior Notes due 2028 (the “Notes”). The Notes were sold to J.P. Morgan Securities LLC, Barclays Capital Inc., BofA Securities, Inc., Citigroup Global Capital Markets Inc., 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 Notes are governed by an Indenture, dated as of June 21, 2021, 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 4.000% per annum, commencing on January 15, 2022. The Notes will mature on July 15, 2028.
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 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, 2024, 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, 2024, SiriusXM may redeem the Notes, in whole or in part, at any time at the redemption prices set forth in the Indenture. In addition, prior to July 15, 2024, SiriusXM may, on one or more occasions, redeem up to 40% of the aggregate principal amount of the Notes with the proceeds of certain equity offerings at a redemption price equal to 104.000% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption.
Change of control and other restrictive covenants. The Notes are subject to covenants that, among other things, require SiriusXM to make an offer to repurchase the Notes at 101% of their principal amount in the event of a change of control and a downgrade in the ratings of the 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, the Indenture restricts SiriusXM’s non-guarantor subsidiaries’ ability to create, assume, incur or guarantee additional indebtedness without such non-guarantor subsidiary guaranteeing the Notes. Sirius XM Holdings Inc. is not subject to these restrictive covenants.
Events of default. The following constitute events of default under the 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 to redeem all of its outstanding 3.875% Senior Notes due 2022 (the “2022 Notes”) and to repay, in part, borrowings outstanding under its senior secured revolving credit facility. Beginning August 1, 2021, SiriusXM may redeem the 2022 Notes at a redemption price of 100.000% of the principal amount thereof plus accrued and unpaid interest thereon to, but excluding, the redemption date. Pending application of the offering proceeds to redeem the 2022 Notes, SiriusXM expects to use the net proceeds to repay borrowings outstanding under its senior secured revolving credit facility.
| 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 June 21, 2021, SiriusXM issued a redemption notice pursuant to the indenture governing the 2022 Notes to redeem all of the 2022 Notes on August 1, 2021 at a redemption price of 100.000% of the principal amount thereof, plus accrued and unpaid interest thereon to, but excluding, the redemption date (with payment to be made to the holders thereof on the next business day). As of March 31, 2021, SiriusXM had $1,000 million aggregate principal amount of 2022 Notes outstanding.
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits
| 4.1 | Indenture, dated as of June 21, 2021, among Sirius XM Radio Inc., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 4.000% Senior Notes due 2028, including the form of 4.000% Senior Notes due 2028. | |
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. | |
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: June 21, 2021