XM Satellite Radio holders agree to waive change-of-control repurchase obligation for 9¾% notes

By Jennifer Chiou

New York, July 17 - XM Satellite Radio Holdings Inc. entered into a written agreement on Monday with holders of a majority of the company's 9¾% senior notes due 2014 to waive the change-of-control repurchase obligation under the indenture of the notes, according to an 8-K filing with the Securities and Exchange Commission.

The indenture obligation arose because of the previously announced merger of XM Satellite Radio with a wholly owned subsidiary of Sirius Satellite Radio Inc.

Under the waiver, XM will start an offer to exchange the 9¾% notes for a combination of (i) at least $400 million of cash and (ii) up to $200 million of a new series of senior notes to be issued by XM.

The waiver is subject to the completion of the merger and the satisfaction of various other merger-related refinancing transactions.

If the merger has not occurred by Aug. 31, the waiver, unless extended, will cease to be effective.

The new exchange notes will mature in 2013 or 2014 and the effective yield on these new senior notes will not be less than 13.92% per year. In the event that XM issues less than $150 million of the notes, the effective yield on the new notes will not be less than 15% per year.

XM is a satellite radio services company located in Washington, D.C.

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