By Demian Russian
Sirius XM Radio (NASDAQ:SIRI) moved further down the path towards returning capital to shareholders this morning with an announcement that the company had entered into a new $1.25 billion five-year senior secured revolving credit facility with a syndicate of banks and other financial institutions. This new credit facility is secured by substantially all of the assets of the company and its subsidiaries, and was not drawn upon at closing. Sirius XM Radio stated that the company “will use borrowings under this facility for working capital and other general corporate purposes, including without limitation, share repurchases, dividends and the financing of acquisitions.”
“SiriusXM’s credit quality has rapidly improved and we are pleased that the bank market has recognized that fact by oversubscribing the deal, allowing us to upsize the facility to $1.25 billion. This new facility will allow us to continue to drive down average borrowing costs and more tightly manage cash and debt balances and it further strengthens our balance sheet by providing a substantial and readily available source of liquidity for strategic opportunities, including the return of capital to shareholders and acquisitions.”
– David Frear, Chief Financial Officer, SiriusXM Radio
With many analysts expecting substantial share buybacks in their models, todays announcement should be welcome news to the street. Read More
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