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Sirius, XM Refinance In Last Merger Hurdle

7/28/2008 03:31:00 PM Eastern

New York — After receiving federal clearance to merge, Sirius and XM took measures to refinance the last of XM’s $1.1 billion in debt, to clear the final hurdle in the companys’ epic $3.3 billion satellite radio deal.

With the new financing, announced today, analyst Kit Spring of Stifel Nicolaus and Company said, “We expect the deal to close in the next day or two.”

XM announced this morning it is offering $550 million in senior convertible notes that would “successfully refinance their balance sheet, if they were to complete everything that has been announced,” marking “the last hurdle to a merger,” agreed RBC Capital Markets analyst David Bank.

XM’s notes will be exchangeable to Sirius common stock.

The announcement ends a race by XM over the past few weeks to refinance a total of $1.1 billion in debt that was subject to “change of control” clauses that were triggered by the merger.

To help XM’s latest note offering, Sirius announced today it will offer a total of $440 million in common stock. Bank called the Sirius offering “complementary” to XM’s offering in assuring there is enough stock available to be exchanged.

Spring agreed. “This is the final piece of financing required to close the deal which has now received all the necessary regulatory approvals.”