XM Satellite Radio begins cash tender offer for 11¼% notes due 2013

By Marisa Wong

Madison, Wis., Oct. 13 - XM Satellite Radio Inc., a wholly owned subsidiary of Sirius XM Radio, has started a cash tender offer to purchase for cash any and all of its 11¼% senior secured notes due 2013.

The company is also soliciting consents from holders to eliminate most of the restrictive covenants and certain of the events of default contained in the indenture governing the notes and to release the security for, and guarantees of, the notes under the indenture and related documents.

The consent payment deadline is 5 p.m. ET on Oct. 26, and the tender offer will expire at midnight ET on Nov. 9.

Notes tendered may be withdrawn at any time at or before the consent payment deadline but not afterward.

The total consideration for each $1,000 principal amount of notes validly tendered by the consent deadline and accepted for purchase will be $1,120, which includes a consent payment of $20 per $1,000 of notes.

Holders who tender their notes after the consent deadline but at or before the expiration time will receive only the tender offer consideration of $1,100 per $1,000 of notes.

In addition, the company will pay interest accrued from the last interest payment date to, but not including, the applicable payment date for the notes.

XM said it has reserved the right, at any time after the consent payment deadline but prior to the expiration time, to accept for purchase all notes tendered before such early acceptance date.

The company said it will, after the expiration time, accept for purchase all notes tendered before the expiration time.

XM's acceptance of notes tendered for purchase is subject to the satisfaction or waiver of certain conditions, including, XM's receipt of proceeds of at least $550 million from a private offering of new notes.

The offer is not conditioned upon receipt of the needed consents to authorize the amendment of the indenture. Consents of two-thirds of the outstanding notes are required for the amendments.

J.P. Morgan Securities LLC (800 245-8812 or 212 270-1200) is the dealer manager for the tender offer and solicitation agent for the consent solicitation. Global Bondholder Services Corp. (866 294-2200) is the depositary and information agent.

Sirius XM is a satellite radio provider based in New York.

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