Does This Hit the Ground? Sirius Swapping Heavy Debt Loads

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Debt-riddled media companies have recently found some success raising funds and lengthening repayment periods.

But this is hardly the stuff of fundamental growth.

In the most recent example, Sirius XM Radio (SIRI) opened an offering of $250 million in senior secured notes.  That amount will be used to pay off debt from Liberty Media Corp., based on an earlier bailout that involved a major surrender in ownership shares.  The new offering will be opened to certain institutional investors, and carry an expiration date of 2015.

The offering encouraged Standard & Poor’s Investors Services to bump Sirius from a B-minus from triple-C-plus, based on improved liquidity and short-term survival prospects.  Meanwhile, the debt-riddled company continues to suffer subscriber declines, based on softening demand and sluggish dashboard conversions.