SIRIUS XM Exchange Existing Convertible Notes

SIRIUS XM Radio Announces Exchange of $172.5 Million of Existing Convertible Senior Notes Due 2009 for New Senior Secured Notes Due 2011

Friday February 13, 2009, 10:44 am EST
SIRIUS XM Radio Inc.


NEW YORK, Feb. 13 /PRNewswire-FirstCall/ -- SIRIUS XM Radio (Nasdaq: SIRI - News) announced today that XM Satellite Radio Holdings Inc., its wholly-owned subsidiary, had exchanged approximately $172.5 million aggregate principal amount of its outstanding 10% Convertible Senior Notes due December 2009 for a like principal amount of its newly issued Senior Secured Notes due 2011. An aggregate of $400 million in principal amount of the 10% Convertible Senior Notes due December 2009 was outstanding prior to this transaction.

The new Senior Secured Notes will mature on June 1, 2011. The notes will bear interest at the following rates: initially at 10% per annum paid in cash; from December 1, 2009 to December 1, 2010, at 10% per annum paid in cash and 2% per annum paid in kind; and from December 1, 2010 to maturity, at 10% per annum paid in cash and 4% per annum paid in kind. After the exchange, approximately $227.5 million aggregate principal of XM Holdings' 10% Convertible Senior Notes due 2009 will remain outstanding. The Company received no proceeds from the exchange.

The purchasers of the new Senior Secured Notes will be paid an aggregate structuring fee of $9.45 million, $5.07 million of which was paid in cash and $4.38 million of which was paid in the form of shares of the Company's common stock based on the closing sales price of the Company's common stock on February 12, 2009, which was $0.074 per share.

The exchange of 10% Convertible Senior Notes due 2009 for new Senior Secured Notes is part of a larger restructuring effort. The Company is in discussions with others with respect to transactions that could refinance some of its and its subsidiaries' indebtedness. These transactions may not be successfully consummated. If these transactions are not consummated, it may be forced to file for bankruptcy protection as early as February 17, 2009.

The new Senior Secured Notes and the shares of the Company's common stock were issued today in private placement transactions exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section 4(2) thereof and have not been registered under the Securities Act or any state securities laws. Unless so registered, neither the new Senior Secured Notes nor the shares of the Company's common stock may be offered or sold in the United States absent an applicable exemption from registration requirements under the Securities Act and any applicable state securities laws. This news release does not constitute an offer to sell, or the solicitation of an offer to buy the notes or the shares of the Company's common stock.

Additional details regarding the transaction will be available on the Current Report on Form 8-K the Company expects to file with the Securities and Exchange Commission today.


http://finance.yahoo.com/news/SIRIUS...-14353964.html

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IMHO...

This is the debt that Ergen COULDN'T get. Ergen bought more than half of the Dec09 debt... so XM has refinanced the amounts that he doesn't have.

This leaves the $175 million Feb09 that Ergen holds; and an additional $227 million of the Dec09 that Ergen likely holds -- taking it up to the $400 million that he is reported to hold.

I still expect the banks to extend the maturities of the XM May09 bank loans, without much issue.

So if Sirius is successful in bringing in "new investors" to infuse cash, specifically $400 million; then that $400 million will be use to buy back all of the bonds that Ergen bought.

That would pretty much conclude the refinancing of most of the maturities this year.


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So Homer you seem to be a bull this morning??? Where as yesterday you seemed more of a bear???

I could be totally off...:confused:

IMHO... this announcement was mandatory to be announced BEFORE any new investor would be willing to loan Sirius money. I believe that its all a done deal now.

If an investor were interested in putting in money into the company -- they would like to know that Sirius is serious about refinancing all the "other" 2009 maturities, no? So Sirius reaches a deal and refinances the remaining Dec09 bonds, not held by Ergen. This leaves the May loans and the Ergen Feb09/Dec09 holdings.

Watch to see if XM announces an extension of the May09 loans next. Although, the banks may not do it either -- until Sirius XM has announced that they have refinanced all the bonds first... kind of a "I'll go after you go" type of thing.

So now we wait but IMHO, I think it's a done deal.


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This should be moving a lot higher. These bondholders would not have agreed to do this if BK was on the table. Major part of the debt overhang just disappeared, can't believe we are still only at a dime or so.

Not a bear, just being honest. Most of the talk yesterday centered around bankrupting the XM subsidiary -- or selling off its transmission assets. I did not agree with either premise whatsoever as being practical.

I was holding out for Sirius to work out a deal with "new" investors to do what I think may be happening.

Could I be wrong? Absolutely. Perhaps they did do a deal with the devil instead (Ergen) and he forced them to announce the refinancing of the remainder of the Dec09 bonds first... that could be. But I just don't see Karmazin doing that. I think he'd rather work with Malone first... and if not, bankruptcy before giving in to Ergen.

We wait. I do feel better right now than I did 24-48 hours ago.



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Karma, its up about 48% currently?!? There's still the overhang of the Feb09 first. If... and I mean IF, they get that straightened around with new investors (or whatever)... and they extend the May09 loans -- then you'll see the pps turn around.

Baby steps.



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Thanks Homer!!! :D

Quote:

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Originally Posted by homer985

IMHO... this announcement was mandatory to be announced BEFORE any new investor would be willing to loan Sirius money. I believe that its all a done deal now.

If an investor were interested in putting in money into the company -- they would like to know that Sirius is serious about refinancing all the "other" 2009 maturities, no? So Sirius reaches a deal and refinances the remaining Dec09 bonds, not held by Ergen. This leaves the May loans and the Ergen Feb09/Dec09 holdings.

Watch to see if XM announces an extension of the May09 loans next. Although, the banks may not do it either -- until Sirius XM has announced that they have refinanced all the bonds first... kind of a "I'll go after you go" type of thing.

So now we wait but IMHO, I think it's a done deal.


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That is my assessment also . . . I do not believe that Ergen will be part of any restructuring going forward . . . this is normal restructuring protocol.

does anyone have the most recent "short interest" reporting?

Looks like Malone and Liberty really are the white knights... NYPost is reporting that Liberty is giving Sirius a bridge loan. I had a feeling that I though something was done -- and today's debt swap was a prelude to it...


http://www.nypost.com/seven/02132009...ius_155024.htm



MALONE OFFERS BRIDGE LOAN TO SIRIUS XM
By PETER LAURIA
Sirius XM CEO Mel Karmazin

Last updated: 7:38 pm
February 13, 2009
Posted: 7:03 pm
February 13, 2009


John Malone's Liberty Media is offering Sirius XM a bridge loan of several hundred million dollars to help the nearly insolvent satellite-radio company pay off debt that matures Tuesday, The Post has learned.

According to a source close to the situation, the loan is part of a two-step approach that Liberty wants to take as it looks to bail out Sirius XM, which is struggling to make its debt payment and fend off takeover maneuvers from EchoStar CEO Charlie Ergen.

As part of the plan, Liberty would provide Sirius XM CEO Mel Karmazin enough cash to repay $175 million in debt that Ergen currently holds and is due Tuesday.That then would give Liberty three months to come up with a plan to restructure Sirius XM's roughly $600 million in debt that comes due in May and in December.

One scenario could involve Liberty borrowing from Ergen's playbook by buying up Sirius XM debt on the open market. Another involves Liberty making a pitch directly to Sirius XM's bondholders.



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