WorldSpace amends convertibles, first-lien notes agreement

By Devika Patel

Knoxville, Tenn., June 16 - WorldSpace, Inc. amended its agreement with each of the four holders of its 8% convertible notes due May 31, 2010 and senior first-lien bridge notes due May 31, 2010, according to an 8-K filed Monday with the Securities and Exchange Commission.

The exchange agreements, dated June 13, amend and restate the $36.1 million in senior first-lien notes and amend and restate the $53.6 million in convertible notes.

The investors also received warrants for 5 million class A common shares, exercisable at $1.55.

The new senior first-lien notes bear interest at Libor plus 650 basis points, payable quarterly, and are repayable on June 30 for approximately $18.65 million, along with all interest through the day of payment, and on July 31.

The company is required to prepay the notes from any new financings, excess cash flows or cash proceeds from asset sales and casualty events, with certain exceptions.

The company may redeem the notes at any time. The new notes remain secured by a first-priority security interest in the assets of the company and its subsidiaries.

The amended and restated convertible notes carry an 8% coupon, payable quarterly. The notes are due on Sept. 30, 2008.

The notes may be redeemed at a price equal to the sum of the outstanding principal and interest plus a prepayment fee of 1.5%.

The notes are convertible into class A common shares at a conversion price of $2.00 per share, subject to adjustment.

The convertible notes are secured by a second-priority security interest in the company's assets.

WorldSpace is a satellite-based digital radio services company based in Silver Spring, Md.

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