21/2% Convertible Notes due 2009
In February 2004, we issued $250,000 in aggregate principal amount of our 21/2% Convertible Notes due 2009 resulting in net proceeds of $244,625. In March 2004, we issued an additional $50,000 in aggregate principal amount of our 21/2% Convertible Notes due 2009 pursuant to an option granted in connection with the initial offering of the notes, resulting in net proceeds of $48,975. These notes are convertible, at the option of the holder, into shares of our common stock at any time at a conversion rate of 226.7574 shares of common stock for each $1,000.00 principal amount, or $4.41 per share of common stock, subject to certain adjustments. Our 21/2% Convertible Notes due 2009 mature on February 15, 2009 and interest is payable semi-annually on February 15 and August 15 of each year. The obligations under our 21/2% Convertible Notes due 2009 are not secured by any of our assets.

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Again, FWIW, the XM Bank credit facility is actually $350 million now, and it matures in May of 2009.

This amount is made up of the original $250 million facillity, which XM borrowed the remainder on earlier this year to use for the MLB escrow deposit… plus an additional $100 million term loan offered by one of the banks, under the same terms of the credit facility. It all “expires” in May of 2009.

I say “expires” instead of “matures” because these are not Bonds — this is Credit. These don’t mature, but rather the agreement between XM and the banks “expires”. So what does this mean? In most cases I’ve seen when companies are not ready to refinance or pay of the credit — they negotiate to extend the length of the agreement. That is done quite often. So if they decide not to refinance this amount — they can extend the term of the facility, with a possible change in the interest rate (up or down, depending on the companies standing and the markets condition).

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What is due and when from Sirius (roughly $302 million):

$300 million, 2.5% Convertible Note, with conversion price of $4.41 per share… these mature on February 15, 2009. These will have to be refinanced.

$1.75 million, 8.75% Convertible Subordinated Note, with a conversion price of $28.4625 per share… these mature on September 29, 2009. This will likely just be paid off with current cashflow.

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What is due and when from XM (roughly $783 million):

$400 million, 10% Convertible Senior Notes (formerly 1.75% Notes), with a conversion price of $50.00 per share of XMSR (equivolent to $10.87 in SIRI)… these mature on December 1, 2009. These will have to be refinanced.

$33.2 million, 10% Senior Secured Discount Convertible Notes (all held by American Honda Motor Co., Inc), with a conversion price of $3.18 per share of XMSR (equivolent to $0.6913 in SIRI)… these mature on December 21, 2009. Honda will likely just convert these and dispose… most of this was hedged by them a long time ago.

$250 million, Senior Secured Revolving Credit Facility. This expires on May 5, 2009. Interest on this is currently, approximately 4.75%. The expiration of this, IMHO, may be extended.

$100 million, Senior Secured Term Loan. This expires on May 5, 2009. The terms of this are nearly the same as the credit facility, and offered by one of the banks involved in the facility. Interest on this was last reported at, approximately 5.5625%. The expiration of this, again IMHO, may be extended.

$0, GM Senior Secured Credit Facility. This expires on December 31, 2009. Interest on this at around 11%… thus there is no balance due on this facility currently. The expiration of this, again, IMHO, will be extended.

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Looking at a calendar:

February 15, 2009 – $300 million (Sirius)
May 5, 2009 – $250 million (XM)
May 5, 2009 – $100 million (XM)
September 29, 2009 – $1.75 million (Sirius)
December 1, 2009 – $400 million (XM)
December 21, 2009 – $33.2 million (XM)
December 31, 2009 – $0.0 (GM facility) (XM)
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Total due in 2009… $1.085 billion

IMHO, $350 milion of this may have their terms extended; $33.2 million will be converted into shares; $1.75 million will be paid in cash; leaving the remaining $700 million that will need to be refinanced for the two issues remaining (Sirius’ $300 million, due February 15, 2009 and XM’s $400 million, due December 1,2009).

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Sirius:
2.5% convertible due 2009: $300 million
3.5% convertible due 2008: $2.25 million
8.75% convertible subordinated note due 2009: $1.75 million.

XM:
1.75% Convertible Senior note due 2009: $400 million
10% Senior secured discount convert due 2009: $30 million

That brings the total debt due 2008/2009 to $734 million in convertibles and senior notes.

It also shows Sirius has a Senior Secured Term Credit agreement (no due date mentioned) of $250 million, and XM has a Senior Secured revolving credit facility for $187.5 million with no due date mentioned. Not sure where those fall.

FWIW, the XM 1.75% Notes mature on December 1, 2009.

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If you roll the converts into a new convert, you will have the initial converts covering their short position at the same time that the new converts are shorting. Though there will be a slight difference in the issue price, it is basically a zero sum game.

What this does not take into effect is if Sirius XM actually pays back some of the debt due. In that case, it would exert a slightly positive pressure on the stock.