Sirius/XM Near Finish Line: WSJ

By TWICE Staff -- TWICE, 7/25/2008

Washington — An agreement in principle has been reached between the Federal Communications Commission (FCC) and XM and Sirius, Kevin Martin, FCC chairman, told the Wall Street Journal yesterday.

“It’s fair to say an agreement in principle has been reached. We’re still trying to work out the language,” the Journal quoted Martin as saying.

As the FCC tries to hash out a deal with Sirius and XM, the latter company is in a countdown to restructure $1.1 billion in debt, which must be refinanced or repurchased before the merger can close.

As of yesterday, XM said it has restructured $778.5 million of that debt, up from about $600 million earlier. Analysts believe XM will fully restructure its debt in time to close the merger, as bond holders tend to wait until the last minute to negotiate for the best terms.

XM’s need to refinance is due to the fact that many of its bonds are subject to “change of control” provisions in the event of a merger.

Martin’s comment yesterday came after Sirius and XM agreed to pay $20 million in fines and to fix over a hundred non-compliant repeaters that were in violation of FCC regulation, as the FCC inches closer to approving the Sirius/XM merger first announced 17 months ago.