Many investors tend to think that debt is bad. Savvy investors understand that some debt is smart, and carrying debt at low interest rates can allow a company a wide range of opportunity. Sirius XM (SIRI) announced today that the company intends to refinance some of its existing debt with new offerings and in addition pay down some of its credit facility.
Sirius XM intends to offer $500 million of senior notes due 2022 to pay down $500 million on the existing 4.25% senior notes that are due in 2020. This move will essentially extend that debt out for two additional years.
Sirius XM intends to offer $1 billion of senior notes due 2027. These new notes will replace the 5.75% notes that currently carry $600 million and are due in 2021. This move leaves approximately $400 million to pay down the credit facility.