Bonds for satellite radio services XM Satellite Radio and SIRIUS Satellite Radio popped a few points last week on news the two are merging. Both SIRIUS' 9.625% '13 notes and XM's 9.75% '14 notes were up two-and-a-half points to trade around 103 on Tuesday and were even trading as high as 104. By Thursday, however, both had edged back down; SIRIUS to around 101 and XM to around 102.
The companies announced the merger last Monday in a transaction valued at $13 billion. Morgan Stanley acted as SIRIUS' financial advisor and JPMorgan as XM's. The two are now pending a congressional hearing regarding anti-trust and competition policies. Sirius attempted to tap the bond market in April 2005 to raise $250 million in 10-year, triple-C notes but a weakened risk appetite forced it to put the sale on hold (LMW, 5/11/2005). Calls to company spokesmen were not returned.