(Bloomberg) -- Sirius XM Holdings Inc.’s bonds slumped in secondary trading Tuesday after Liberty Media Corp. proposed splitting off the business that houses SiriusXM and combining it with the rest of Sirius XM Holdings. 

One of the company’s bonds — a 5.5% note due July 2029 — fell by roughly 0.649 cents to 87.75 cents as of 3:35 p.m. New York time, according to Trace. Other debt that moved is a 4.125% bond due July 2030 that saw its price fall by 1.125 cents on the dollar as of 4:04 p.m. 

“The potential Liberty transaction was widely expected and largely priced into current levels,” wrote Davis Hebert, a senior analyst at CreditSights, in a Tuesday note. “Bonds are down modestly on the news and we would buy on weakness,” Hebert added.

Read more: Liberty Media Plans to Split Off SiriusXM as Malone Shuffles

Based on the amount of debt attributed to Liberty’s SiriusXM tracking stock, it appears the deal will add about $3 billion to Sirius XM’s current debt load, which it can probably handle given that it produces a lot of free cash flow, according to Stephen Flynn, a Bloomberg Intelligence analyst. 

“A few of the obligations are convertible into, or secured by, Sirius stock, and I’m not sure how those obligations will be treated,” Flynn said. “We also don’t have details for where in the cap stack the debt will be. For example, Sirius’ bonds are issued from the Sirius XM Radio subsidiary, and may be structurally senior to any of the debt that comes from Liberty.”

SiriusXM acknowledged that it received Liberty’s offer and said it’s evaluating the proposal. A representative for the company did not immediately respond to a request for comment. 

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