By David “Newman” Phillips

There is no way to avoid it. This week, there is a going to be a PR release from Sirius XM (NASDAQ:SIRI) stating that they have received a delisting notice from the NASDAQ. As of the end of business on Monday, March 15th, Sirius XM officially ended their 180 day extension given to them by the NASDAQ to regain compliance with the Minimum Bid requirement of $1. As we all know, Sirius fell 2 days short with their run over $1 at the end of February. Below is a step-by-step description of the delisting process that Sirius XM will be going through over the next few days/weeks/months.

Either Tuesday or Wednesday, the NASDAQ will send Sirius XM an official notice that they are being delisted from the NASDAQ. By NASDAQ and SEC rules, the company must announce this delisting letter in a PR release “as promptly as possible, but not more than four business days following the receipt of the Staff Delisting Determination.”  This means that you will see this PR hit the wires Thursday or Friday.

The company has 7 calendar days from the date of the delisting determination to appeal. No response from the company results in automatic delisting. Any appeal request will stay the suspension and delisting action pending the issuance of a written Panel Decision.  Sirius XM would have to submit a hearing fee to the NASDAQ to cover the cost of the hearing within 15 calendar days from the date of the Staff Delisting Determination.

The Hearings Department will schedule the hearing within 45 days of the request for hearing. Sirius XM will be provided at least 10 calendar days notice of the hearing. READ THE FULL ARTICLE >>

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By Brandon Matthews (Please read part 1 first)

In part 1, I hope to have conveyed some information on negative debt covenants, the capital structure of Sirius XM Radio (NASDAQ: SIRI) and highlighted its improved debt maturity schedule. The negative debt covenants written within the notes that will soon be retired are too numerous to discuss within a single report. However, there is another specific “negative covenant” that I would like to highlight. This one has to do with potential synergies that might be realized through Liberty Capital (NASDAQ: LCAPA), Direct TV (NYSE: DTV) or any other potential joint venture agreement.

As an example, Liberty and Sirius XM have discussed the possibility of a partnership with Liberty Satellite Radio and its acquisition of WorldSpace. Specifically, Sirius XM CEO Mel Karmazin has stated that the company could offer its expertise and content, and Liberty could offer the cash and infrastructure. This would seem reasonable to most. The existing negative covenants however, could have hindered these plans.

Any joint venture agreements carry with them specific financial penalties, should one of the parties be unable to fulfill its obligations under the contract. Any such potential penalty can be viewed as a risk to bondholders, and the negative covenants prevented Sirius XM from accepting any additional risk, however remote. READ THE FULL ARTICLE >>

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By Brandon Matthews

News of Sirius XM Radio’s (NASDAQ: SIRI) debt refinancing on Friday has been met with widespread applause by even the company’s harshest critics. The news that the company had moved $500 million of its 2013 debt obligations at a lower interest rate of 8 3/4% to 2015 was applauded by all. Late Friday, news followed that the company had increased its offering by $300 million to refinance a 2012 loan obligation, which carried an interest rate of only 2.56 %. This has led to some confusion that has fueled speculation. I have my own theories…

In its SEC filings, Sirius XM Radio stated that the two issues that were refinanced contained negative covenants. The term “negative covenants” in layman’s terms can be defined as any rule that prevents the company from doing something it would like to otherwise do. Sirius XM’s annual report states:

The negative covenants contained in the Senior Secured Term Loan are substantially similar to those contained in the indenture governing SIRIUS’ 9 ⁵/8% Senior Notes due 2013.

Many have begun to look at those negative covenants to determine the benefits that might be realized going forward, by Sirius XM in having eliminated the two issues. In my view, there are two specific covenants worth noting. The first has to do with the ability of Sirius XM to refinance debt carried by its subsidiary. READ THE FULL ARTICLE >>

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The NASDAQ OMX Group, Inc. (NASDAQ: NDAQ) announced today, that Sirius XM Radio (NASDAQ:SIRI) will be added to the NASDAQ Q-50 Index, following the results of its quarterly re-ranking. Sirius XM Radio’s addition to the Index will become effective with the market open on Monday, March 22, 2010. The Index is designed to track the performance of the 50 securities that are next in line to replace the securities currently included in the NASDAQ-100 Index.

The index has no minimum bid requirement. Qualification is based on market capitalization. The top 50 securities not currently in the NASDAQ-100 Index are selected for inclusion in the Index. The data used in the ranking includes end of January, April, July and October market data and are updated for total shares outstanding submitted.

To be eligible for inclusion in the Index, a security must meet the existing NASDAQ-100 Index eligibility criteria, stated as follows:

READ THE FULL ARTICLE >>

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By Brandon Matthews

There have been a few statements recently in Satellite Radio circles that have peaked my interest. The first came during Sirius XM Radio’s (Nasdaq:SIRI) fourth quarter earnings call held two weeks ago, in which Sirius XM CEO Mel Karmazin informed analysts that the used car market will be the new retail market going forward.

Still another tidbit of information came again from Karmazin in a letter published last week, which includes a statement that there will be 90 million Satellite Radio equipped vehicles on the road by 2015. The last came from BGB Securities Analyst, Murray Arenson, whom just this week highlighted the importance of Sirius XM’s potential in the used car market. The analyst stated that there are only 27 million vehicles factory installed with Satellite Radio on the road today.

Even if you are not smarter than a fifth grader, these are pretty easy numbers to work with. There will be over 60 million more potential subscribers on the road in five years than there are today. When we consider that Sirius XM has 19 million subscribers today out of 27 million, which equates to approximately 2/3 of the current market, we can forecast a five year subscriber goal of about 60 million. This may seem a bit outlandish to some, when considering that it has taken over seven years to reach under 20 million, while witnessing a slowdown in subscriber growth. Am I nuts? Perhaps. READ THE FULL ARTICLE >>

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