Liberty Media (LINTA) Announces Actions to Reduce Risk, Strengthen Balance Sheet
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Liberty Media Corporation (Nasdaq: LINTA) (Nasdaq: LCAPA) (Nasdaq: LMDIA) today announced several actions at Liberty Capital to reduce risk and strengthen its balance sheet.
Last week, Liberty used cash for the voluntary early retirement of $750 million face amount of its Exchangeable Debentures attributable to Liberty Capital. Liberty paid $187.5 million (of which $37.5 million was existing cash collateral) to retire $400 million face amount of its 4% Exchangeable Debentures due 2029 and $350 million face amount of its 3-3/4% Exchangeable Debentures due 2030. Liberty also terminated swap arrangements that reference the 4% and 3-3/4% Exchangeable Debentures with no additional payment. Including this payment, the total cash used to retire the $750 million face amount of Exchangeable Debentures and swaps referencing these Exchangeable Debentures was $503 million, of which $315 million was paid to settle swap arrangements that were settled in November 2008. Liberty has now settled all of its swaps that reference its own or third-party debt.
In Q1, Liberty also took other action to reduce its counterparty risk exposure. Liberty drew down an additional $1,638 million against derivative positions related to its Sprint Nextel / Embarq equity position, the present value of the remaining borrowing capacity, bringing total outstanding debt against derivative positions to $2,263 million. As these derivative positions mature in 2009 and 2010, Liberty expects to use the proceeds, anticipated to total $2,379 million, to offset these borrowings.
Also in the first quarter, Liberty unwound the remaining derivative position related to its LodgeNet Interactive holdings. As a result, Liberty received $41.4 million in cash and no longer holds any LodgeNet Interactive equity.
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