Calling the terms and nature of the new deal "tantamount to a default," S&P analyst Steve Wilkinson says the exchange offer XM announced yesterday — to swap $325 million worth of notes due in 2010 for an identical amount of notes due 2009 — isn't good for noteholders. "Although the exchange offer will not alter the principal value of the notes or the interest rate," he says, "it will require noteholders to defer cash interest payments for a period of time, which is considered a material concession." Wilkinson also warns that if the swap isn't approved by the required 90% of noteholders, XM will be precluded from completing two other financing agreements that are "critical to its ability to continue as a going concern." S&P lowered its corporate credit rating on XM from "CCC-" to "CCC+" and warned that if the exchange offer is completed the issue rating on the new senior secured notes will be lowered to "D" and the company's corporate credit rating will be lowered to "SD," indicating a selective default.
Welcome to DBSTalk
Like most online communities you must register to view or post in our community. Sign-up is a free and simple process that requires minimal information. Be a part of our community by signing in or creating an account. The Digital Bit Stream starts here!
- Reply to existing topics or start a discussion of your own
- Subscribe to topics and forums and get email updates
- Send private personal messages (PM) to other forum members
- Customize your profile page and make new friends
Guest Message by DevFuse
Standard & Poor's Bashes XM Financing Deal
No replies to this topic
Posted 26 December 2002 - 08:11 AM
Have a Great Day!