In a turn of events worthy of a Hollywood movie script, the New York Post is reporting that “John Malone’s Liberty Media is offering Sirius XM a bridge loan of several hundred million dollars to help pay off debt that matures Tuesday.” The article also mentions that Liberty and Sirius XM are working together on a plan to deal with Sirius XM’s other debt obligations due in May and December.

It appears that Sirius XM has in fact accepted the offer as the following news had come across the Dow Jones Newswires just hours earlier:

S&P Removes Sirius XM Rtgs From CreditWatch Neg
Last update: 2/13/2009 4:31:38 PM
(MORE TO FOLLOW) Dow Jones Newswires (201-938-5400)
February 13, 2009 16:31 ET (21:31 GMT)

With literally hundreds of news agencies reporting that Sirius was heading for a Chapter 11 filing as early as Tuesday, it would appear that the bondholders were given notice of the events that were going on behind closed doors at Sirius XM headquarters.

Taking a step back to review the bigger picture, this should generate a lot of excitement on Wall Street. With credit markets making it hard for struggling companies to survive in the current environment, news of such a bridge loan warrants center stage as other companies may now look to the lead provided by Mel Karmazin and John Malone.

This could turn out to be a SIRI investors best case scenario¬†as the news had broken after 7 p.m. yesterday. Facing a three day weekend, most traders had left for the weekend yet the stock which had risen nearly 42% during the regular market hours on Friday, rose an additional 23% as the news was breaking. With all of the outstanding debt issues currently being addressed, Tuesday trading may bring new life to the struggling equity. The nagging debt has held SIRI shares down since the completion of the successful merger of the two U.S. satellite radio providers. With the company’s debt issues removed, SIRI investors who have held their shares may finally be rewarded.

Position: Long Sirius XM