XM Taps Credit Facility, Extends Chairman Contract (XMSR, SIRI)

XM Satellite Radio Inc. (NASDAQ: XMSR) and its XM Satellite Radio Holdings Inc. announced in a filing today that (on June 26, 2008) it has entered into a Credit Agreement relating to a $100 million term loan with UBS AG.

XM said it has used a portion of the loan proceeds to repay the previously disclosed draw under its $150 million GM credit facility. Following the repayment, XM noted in the filing that it has full access to the GM credit facility.

On June 26, 2008, the lenders who are party to XM’s $250 million revolving secured facility entered into a fourth amendment to the original facility to approve the credit agreement (which replaces XM’s right under the Original Facility to elect to increase the size of the Original Facility by $100 million).

Goldman Sachs said that both Sirius Satellite Radio Inc. (NASDAQ: SIRI) and XM would need cash, but this is just the credit facility side of it.

The Credit Agreement has a scheduled maturity date of May 5, 2009 and will survive if the pending merger with Sirius Satellite Radio is consummated.  The agreement is also secured by substantially all of XM’s assets other than specified property.  Additionally, this contains a financial covenant that requires XM to maintain a level of cash (and equivalents) from time to time of either $50 million or $75 million.

In a separate note, the company noted in this filing that Chairman Gary parsons extended his employment term from June 30, 2008 to November 18, 2009.

Jon C. Ogg
June 26, 2008