Sirius XM will pay off $681.5 million in 13 percent...

will get more financial leverage, allowing it to issue new debt at lower rates for use in buying back shares, analysts said. The move means Sirius XM will have $2.44 billion in debt, but no payments due until December 2014. Sirius XM earlier this month issued $400 million in new 5.25 percent debt due in 2022, which it is using along with $281 million in cash to repay the 13 percent senior notes. Liberty, which owns 48 percent of Sirius XM, filed an application Friday seeking FCC approval for its buying additional shares to get de jour control of Sirius XM (CD Aug 21 p16). Liberty will not convert its preferred shares in quantities needed to own more than 50 percent of Sirius XM until the FCC grants the application, Liberty has said. There’s a low probability that Liberty Media will successfully execute a spin-merge of its Sirius XM stake over the next 12-18 months, Evercore Partners analyst Bryan Kraft said. The spin-merge appears to be on hold, given Liberty’s “stated intention to participate in the optimization of Siri’s capital structure and potentially sell pro rata into repurchases,” he said in a research note. Last week, Liberty stated its intent to increase its stake in Sirius above 50 percent to have de jure control of the satellite radio company (CD Aug 21 p16). “We estimate that it would take LMCA 25 months to recover the capital deployed to reach 50.1 percent,” Kraft said. The net asset value discount on Sirius XM “should eventually decrease to zero percent, unlocking value in LMCA,” he said. This could transpire either through Liberty achieving 100 percent ownership of Sirius XM “over a several year period or through a spin-merge transaction in 2014 or later,” he said.