Sirius XM Chief Says Merger Debt Is 'Ugly'

Sirius XM Radio struck an "ugly" debt deal to close the merger of the only two U.S. satellite radio operators, chief executive Mel Karmazin said. A bond sale the evening of July 28 allowed Karmazin, previously the chief executive of Sirius, to complete the $2.76 billion all-stock purchase of Washington-based XM Satellite Radio Holdings. Together, XM and Sirius have more than 18 million subscribers and constitute the second-biggest U.S. radio operator by sales, after broadcaster Clear Channel Communications. Karmazin, concerned that traditional radio operators might persuade a judge to block the merger he had pursued for more than a year, sought to conclude the deal within hours of getting regulatory approval. To do so, he needed to accept unfavorable terms on refinancing.