XM Satellite Radio Prices Offering of Exchangeable Senior Subordinated Notes

XM Satellite Radio Prices Offering of Exchangeable Senior Subordinated Notes

WASHINGTON, July 29 /PRNewswire-FirstCall/ -- XM Satellite Radio Holdings Inc. (NASDAQ:XMSR) announced today that XM Satellite Radio Inc. ("XM Radio"), its wholly-owned subsidiary, priced an offering of $550 million aggregate principal amount of exchangeable senior subordinated notes due 2014 (the "Notes"). The Notes, which were offered pursuant to Rule 144A under the Securities Act of 1933 (the "Securities Act"), will bear interest at an annual rate of 7.00%. The Notes will be exchangeable into shares of SIRIUS Satellite Radio Inc. common stock at an initial exchange rate of approximately 533.3333 shares of SIRIUS common stock per $1,000 principal amount of Notes, which is equivalent to an initial exchange price of $1.875 per share of common stock. The exchange rate and the exchange price will be subject to adjustment in certain events. SIRIUS has filed a registration statement with the Securities and Exchange Commission to register the resale of the SIRIUS common stock delivered upon exchange of the Notes.

Interest on the Notes will be payable semiannually in arrears on June 1 and December 1 of each year, beginning December 1, 2008. The Notes will mature on December 1, 2014, unless previously exchanged or repurchased in accordance with their terms prior to such date. The Notes will be XM Radio's unsecured, senior subordinated obligations, will be subordinated to any senior debt of XM Radio and will rank equally with any future senior subordinated debt of XM Radio. The Notes will be fully and unconditionally guaranteed by XM Satellite Radio Holdings Inc. and each of XM Radio's subsidiaries which also guarantee XM Radio's other indebtedness.

The offering is part of a series of transactions to refinance certain debt of XM in connection with the merger with SIRIUS.

The notes have not been registered under the Securities Act or any state securities laws and may only be offered or sold to qualified institutional buyers in conformity with an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

This communication contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements identified by words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "will," "should," "may," or words of similar meaning. Such forward-looking statements are based upon the current beliefs and expectations of XM's and SIRIUS' management and are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those contemplated by such forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements in this press release include demand for XM Satellite Radio's service, SIRIUS Satellite Radio's service, the companies' dependence on technology and third party vendors, their potential need for additional financing, as well as other risks described in XM Satellite Radio Holdings Inc.'s Form 8-K filed with the Securities and Exchange Commission on 7-21-08 and SIRIUS Satellite Radio Inc.'s Form 10-K. Copies of the filing are available upon request from XM Radio's Investor Relations Department for each of XM and SIRIUS.

First Call Analyst:
FCMN Contact: mkaleya@joelefrank.com

Source: XM Satellite Radio Holdings Inc.

CONTACT: Media Relations, Nathaniel Brown, +1-212-708-6170,
Nathaniel.Brown@xmradio.com, or Chance Patterson, +1-202-380-4318,
Chance.Patterson@xmradio.com; or Investor Relations, Joe Wilkinson,
+1-202-380-4008, Joe.Wilkinson@xmradio.com, or Richard Sloane,
+1-202-380-1439, Richard.Sloane@xmradio.com, all of XM

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Profile: International Entertainment