| Debt |
Debt
Our debt as of September 30, 2014 and December 31, 2013 consisted of the following:
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Carrying value at |
Issuer / Borrower |
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Issued |
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Debt |
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Maturity Date |
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Interest Payable |
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Principal Amount |
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September 30, 2014 |
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December 31, 2013 |
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Sirius XM
(a)(b)
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August 2008 |
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7% Exchangeable
Senior Subordinated Notes (the "Exchangeable Notes") |
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December 1, 2014 |
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semi-annually on June 1 and December 1 |
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$ |
502,364 |
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$ |
502,007 |
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$ |
500,481 |
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Sirius XM
(a)(c) |
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May 2013 |
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4.25% Senior Notes
(the "4.25% Notes")
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May 15, 2020 |
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semi-annually on May 15 and November 15 |
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500,000 |
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495,346 |
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494,809 |
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Sirius XM
(a)(c) |
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September 2013 |
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5.875% Senior Notes
(the "5.875% Notes")
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October 1, 2020 |
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semi-annually on April 1 and October 1 |
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650,000 |
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643,566 |
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642,914 |
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Sirius XM
(a)(c) |
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August 2013 |
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5.75% Senior Notes
(the "5.75% Notes")
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August 1, 2021 |
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semi-annually on February 1 and August 1 |
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600,000 |
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594,940 |
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594,499 |
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Sirius XM
(a)(c) |
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May 2013 |
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4.625% Senior Notes
(the "4.625% Notes")
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May 15, 2023 |
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semi-annually on May 15 and November 15 |
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500,000 |
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494,998 |
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494,653 |
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Sirius XM
(a)(c)(d) |
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May 2014 |
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6.00% Senior Notes
(the "6.00% Notes")
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July 15, 2024 |
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semi-annually on January 15 and July 15 |
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1,500,000 |
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1,483,611 |
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— |
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Sirius XM
(a)(c)(e) |
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August 2012 |
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5.25% Senior Secured Notes (the "5.25% Notes") |
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August 15, 2022 |
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semi-annually on February 15 and August 15 |
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400,000 |
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395,020 |
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394,648 |
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Sirius XM
(f) |
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December 2012 |
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Senior Secured Revolving Credit Facility (the "Credit Facility") |
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December 5, 2017 |
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variable fee paid quarterly |
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1,250,000 |
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145,000 |
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460,000 |
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Sirius XM |
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Various |
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Capital leases |
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Various |
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n/a |
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n/a |
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14,583 |
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19,591 |
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Total Debt |
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4,769,071 |
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3,601,595 |
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Less: total current maturities non-related party |
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498,433 |
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496,815 |
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Less: total current maturities related party |
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10,992 |
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10,959 |
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Total long-term debt |
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$ |
4,259,646 |
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$ |
3,093,821 |
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(a) |
The carrying value of the notes are net of the remaining unamortized original issue discount. |
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(b) |
Sirius XM and Holdings are co-obligors with respect to the Exchangeable Notes. The Exchangeable Notes are senior subordinated obligations and rank junior in right of payment to our existing and future senior debt and equally in right of payment with our existing and future senior subordinated debt. Substantially all of our domestic wholly-owned subsidiaries guarantee our obligations under these notes on a senior subordinated basis. The Exchangeable Notes are exchangeable at any time at the option of the holder into shares of our common stock at an exchange rate of 543.1372 shares of common stock per $1,000 principal amount of the notes, which is equivalent to an approximate exchange price of $1.841 per share of common stock. During the three months ended September 30, 2014, $6 of the Exchangeable Notes were converted into shares of our common stock. During the three and nine months ended September 30, 2014, the common stock reserved for conversion in connection with the Exchangeable Notes was considered to be dilutive in our calculation of diluted net income per share and anti-dilutive during the three and nine months ended September 30, 2013.
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(c) |
Substantially all of our domestic wholly-owned subsidiaries have guaranteed these notes. |
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(d) |
In May 2014, Sirius XM issued $1,500,000 aggregate principal amount of 6.00% Senior Notes due 2024, with an original issuance discount of $16,875.
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(e) |
In April 2014, we entered into a supplemental indenture to the indenture governing the 5.25% Notes pursuant to which we granted a first priority lien on substantially all of the assets of Sirius XM and the guarantors to the holders of the 5.25% Notes. The liens securing the 5.25% Notes are equal and ratable to the liens granted to secure the Credit Facility. |
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(f) |
In December 2012, Sirius XM entered into a five-year Credit Facility with a syndicate of financial institutions for $1,250,000. Sirius XM's obligations under the Credit Facility are guaranteed by certain of its material domestic subsidiaries and are secured by a lien on substantially all of Sirius XM's assets and the assets of its material domestic subsidiaries. Borrowings under the Credit Facility are used for working capital and other general corporate purposes, including dividends, financing of acquisitions and share repurchases. Interest on borrowings is payable on a quarterly basis and accrues at a rate based on LIBOR plus an applicable rate. Sirius XM is also required to pay a variable fee on the average daily unused portion of the Credit Facility and is payable on a quarterly basis. The variable rate for the Credit Facility was 0.35% per annum as of September 30, 2014. As of September 30, 2014, $1,105,000 was available for future borrowing under the Credit Facility. Sirius XM's outstanding borrowings under the Credit Facility are classified as Long-term debt within our unaudited consolidated balance sheets due to the long-term maturity of this debt.
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Debt Repurchases
During the three and nine months ended September 30, 2013, we purchased $770,987 and $800,000, respectively, of our then outstanding 8.75% Senior Notes due 2015, for an aggregate purchase price, including premium and interest, of $894,883 and $927,860, respectively. We recognized $101,063 and $104,818, respectively, to Loss on extinguishment of debt and credit facilities, net, consisting primarily of unamortized discount, deferred financing fees and repayment premium, as a result of these transactions.
During the three and nine months ended September 30, 2013, we purchased $59,799 and $160,449, respectively, of our then outstanding 7.625% Senior Notes due 2018, for an aggregate purchase price, including premium and interest, of $66,782 and $179,351, respectively. We recognized $6,908 and $19,530, respectively, to Loss on extinguishment of debt and credit facilities, net, consisting primarily of unamortized discount, deferred financing fees and repayment premium, as a result of these transactions.
Covenants and Restrictions
The Exchangeable Notes require compliance with certain covenants that restrict our ability to, among other things, (i) enter into certain transactions with affiliates and (ii) merge or consolidate with another person.
Under the Credit Facility, Sirius XM, our wholly-owned subsidiary, must comply with a debt maintenance covenant that it not exceed a total leverage ratio, calculated as total consolidated debt to consolidated operating cash flow, of 5.0 to 1.0. The Credit Facility generally requires compliance with certain covenants that restrict Sirius XM's ability to, among other things, (i) incur additional indebtedness, (ii) incur liens, (iii) pay dividends or make certain other restricted payments, investments or acquisitions, (iv) enter into certain transactions with affiliates, (v) merge or consolidate with another person, (vi) sell, assign, lease or otherwise dispose of all or substantially all of Sirius XM's assets, and (vii) make voluntary prepayments of certain debt, in each case subject to exceptions.
The indentures governing our notes restrict Sirius XM's non-guarantor subsidiaries' ability to create, assume, incur or guarantee additional indebtedness without such non-guarantor subsidiary guaranteeing each such series of notes on a pari passu basis. The 4.25% Notes, 4.625% Notes, 5.75% Notes, 5.875% Notes and 6.00% Notes are also subject to covenants that, among other things, limit Sirius XM's ability and the ability of its subsidiaries to create certain liens; enter into sale/leaseback transactions; and merge or consolidate.
Under our debt, the following generally constitute an event of default: (i) a default in the payment of interest; (ii) a default in the payment of principal; (iii) failure to comply with covenants; (iv) failure to pay other indebtedness after final maturity or acceleration of other indebtedness exceeding a specified amount; (v) certain events of bankruptcy; (vi) a judgment for payment of money exceeding a specified aggregate amount; and (vii) voidance of subsidiary guarantees, subject to grace periods where applicable. If an event of default occurs and is continuing, our debt could become immediately due and payable.
At September 30, 2014 and December 31, 2013, we were in compliance with our debt covenants.
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