XM Amends Note Agreement
July 11, 2008 at 8:22 AM (PT)
XM SATELLITE RADIO HOLDINGS has amended its previously announced agreement with holders of its $400 million aggregate principal amount of 1.75% Convertible Senior Notes due 2009. Pursuant to the amendment, XM will cause the trustee to amend the indenture governing the convertible notes to increase the interest rate to 10% per annum, with such increased interest rate to be given effect, subject to completion of the proposed merger of XM with a subsidiary of SIRIUS SATELLITE RADIO INC., as of JULY 2, 2008.
The noteholders that are party to the amended agreement have agreed not to assert any claim that the merger constitutes a "Fundamental Change" under the existing indenture, which, if any, would require an offer be made by XM to repurchase the existing notes at par within a specified period following the merger. The indenture amendment will clarify that the merger does not constitute a Fundamental Change with respect to the notes held by the noteholders that are party to such agreement. In light of the amendment, XM no longer intends to commence the previously announced exchange offer to exchange new convertible senior notes for the existing convertible notes.