XM Satellite Radio said Thursday that it is restructuring some debt in anticipation of the Federal Communications Commission's approval of its merger with Sirius Satellite Radio.
XM is offering $778.5 million in senior notes with an effective yield of 16% annually, combining a 13% annual yield with a discount on the purchase price -- investors will pay only 89.93% of the principal amount.
That will mean XM will actually yield $700,105,050 from the offering.
The offering is structured so that it can be unwound if the deal does not go through, although the deal now appears likely to be consummated once XM and Sirius hammer out the details of a consent decree resolving complaints about some of its equipment.
After that, Republican commissioner Deborah Taylor Tate is widely expected to sign off on a proposal already approved by FCC chairman Kevin Martin and commissioner Robert McDowell to allow the merger subject to a number of conditions the companies already generally agreed to.