Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : CDRD (CD Radio) -- Ignore unavailable to you. Want to Upgrade?

To: John Gault who wrote (813)	5/20/1999 12:51:00 PM
From: SIer formerly known as Joe B.	Respond to of 904

CD Radio Outlook Revised to Negative by S&P; Senior Notes Rated CCC+ NEW YORK, May 20 /PRNewswire/ -- Standard & Poor's today revised its rating outlook on CD Radio Inc. to negative from developing. At the same time, Standard & Poor's assigned its triple-'C'-plus rating to CD Radio's Rule 144A offering of $200 million 14.5% senior secured notes due 2009. The outstanding triple-'C'-plus corporate credit and senior secured debt ratings for the company were affirmed. The outlook revision is based on increased pre-operational funding requirements and delays in the expected commencement of the company's satellite-delivered radio service. Proceeds from the new notes will be used for satellite construction and launch, as well as for interest payments. Ratings reflect the substantial financial and business development risks that CD Radio faces in the construction, launch, and marketing of its satellite digital radio service for motorists. The anticipated commencement of commercial operations has been delayed by about nine months to the fourth quarter of 2000. Considerable uncertainty attaches to the consumer demand, manufacture, and distribution of the necessary consumer electronic hardware, the required marketing costs, success of programming, and overall system technical viability. However, the company has made progress towards its hardware manufacture and distribution goals and has secured additional programming agreements. Longer-term success will depend on subscriber penetration and stability. CD Radio is a developmental business that holds one of the two FCC licenses to build a nationwide satellite radio service. XM Satellite Radio Inc., the holder of the other license and CD Radio's competitor, is developing a similar, compatible service, which it expects will also be operational in 2000. CD Radio's proposed service requires the purchase of a $199 package, which includes a miniature rear windshield-mounted dish and a radio card that inserts into an automotive cassette player. After installation by the motorist, the service requires a $9.95 per month subscription charge. The service will be transmitted nationwide via satellite and a planned supplementary network of terrestrial repeaters in urban areas, and will offer 50 channels of commercial-free music and 50 channels of advertiser-supported talk and information programming. CD Radio is spending heavily to launch its service and does not expect to generate positive cash flow from operations until the third quarter of 2001, at the earliest. The company estimates that it will require $1.238 billion to develop and commence commercial operation and meet cash requirements through the first year of operations. Of the total funds required, $138 million must still be raised. Since Standard & Poor's ratings were originally assigned, the total funding amount necessary has increased by about $134 million, largely due to delays. Limited flexibility is provided by three years of escrowed interest payments on the new notes and the absence of cash interest payments on the 15% senior secured discount notes until 2003. OUTLOOK: NEGATIVE CD Radio is spending heavily to develop an unproven media service to compete with conventional broadcast radio and the other start-up competitor in this satellite niche. Consumer demand may not be sufficient to support two or even one satellite radio operator, and consumer equipment subsidies may be necessary. While most of the pre-operational financing is in place, additional funds are still required. Once the service is operational, the company faces at least a two- to three-year start-up period before its viability is established. A ratings downgrade could result if CD Radio appears unable to secure additional financing, or in the event of further delays or increases in funding requirements. -- CreditWire SOURCE Standard & Poor's CreditWire -0- 05/20/99 /CONTACT: Eric Geil of Standard & Poor's, 212-438-7833/ /Web site: standardandpoors.com CO: CD Radio Inc. ST: New York IN: TLS SU: RTG * end of story *

To: John Gault who wrote (813)	5/27/1999 8:55:00 AM
From: AJ Berger	Read Replies (2) \| Respond to of 904

WARNING: Hype Press Release Coming! you may see a press on CDRD regarding negotiations with General Motors to put CDRD's product in their cars as a factory option. These negotiations have been going on and off for over a year, and the Bass Brothers are simply retelling us that CDRD is restarting the negotiations in order to drive up the stock price to please their share holding golf buddies. Don't get suckered in, If you're Long, take your money out of this pit and never look back. If you want to short, wait for the volume to die down, and then ride down the drift, but don't expect much, since there are major shareholders with positions in the $30's that will try any dirty trick to keep this stock from free fall.