XM Satellite determines conversion premium for 10% convertibles tender offer

By Angela McDaniels

Seattle, Nov. 8 - XM Satellite Radio Holdings Inc. said holders will receive 25.48 shares of class A common stock for each $1,000 principal amount of 10% senior secured discount convertible notes due 2009 tendered for conversion in addition to the regular amount of stock that will be issued.

The company began a tender offer on Sept. 26 to encourage holders to convert.

The company determined that holders would receive 25.48 additional shares by dividing $320.80 - the conversion premium - by $12.59, the average closing price of the company's class A common stock for the five-day period ended Nov. 8.

The tender offer ends at midnight ET on Nov. 10. The deadline was extended from Oct. 19.

As of midnight ET on Nov. 7, the company said holders of $23.5 million of the convertibles had tendered for conversion.

Under their original terms, the notes are convertible into class A stock at $3.18 per share. The company issued $99.9 million of the notes in January 2003.

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.

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

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