XM restructures debt approaching a sale to Sirius

PHILADELPHIA (AP) - XM Satellite Radio Holdings Inc. on Friday said it has reached an agreement to restructure about $600 million of debt, putting itself a step closer to completing its purchase by rival Sirius Satellite Radio Inc. But it comes at a cost. Holders of about $600 million of senior notes with an interest rate of 9.75 percent will get at least $400 million in cash and $200 million in new debt. Some analysts were surprised by the size of the upfront cash payment; Cowen and Co. had projected, at worst, $22.5 million. The new notes also will carry a higher yield or rate of return than the old debt--at least 13.92 percent a year, or 15 percent or higher annually if less than $150 million of new debt is issued. The old notes mature in 2014, the new debt in 2014, or 2013 under certain conditions. "It's certainly... [read full story]