XM Satellite prolongs exchange for 10% convertibles

By Jennifer Chiou

New York, Oct. 20 - XM Satellite Radio Holdings Inc. announced the extension of its offer to encourage holders to convert its 10% senior secured discount convertible notes due 2009 to midnight ET on Nov. 10.

As of midnight ET on Oct. 19, the previous deadline, the company said holders of $22.6 million of its $99.9 million of convertibles had tendered for conversion.

Under the tender, the company is offering $320.80 in shares of class A common stock as an incentive for each $1,000 of the notes tendered for conversion, in addition to the regular amount of stock that would be issued.

Due to the extension, pricing for the tender offer will be based on the average closing price of the company's class A common stock for the five-day period ending on Nov. 8.

As previously announced, the tender offer follows a Sept. 22 agreement with American Honda Motor Co., director George Haywood and another investor to issue 28.9 million shares in exchange for $42.6 million in principal amount of the 10% notes and 79,246 shares of the company's 8.25% series C convertible redeemable preferred stock.

The company has previously settled similar arrangements with Bear Stearns, Royal Bank of Canada and Eastbourne Capital.

Based on the stock's Sept. 21 closing price, the company estimated that it would issue about 19.4 million shares if the entire amount of notes were converted.

Under their original terms, the notes, issued in January 2003, are convertible into class A stock at $3.18 per share.

Between the tender offer and the previous exchange agreements, the company said it expects to retire as much as $100 million in principal amount at maturity of the notes and all of the series C preferred stock.

Washington, D.C.-based XM Satellite Radio is a provider of satellite-delivered entertainment and data content.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.