The exchange notes will mature in 2014, or 2013 in certain circumstances. The yield to maturity on the exchange notes (calculated solely on the basis of interest rate on the exchange notes and the price at which they are offered in exchange for 9.75% Notes) will be calculated on the basis of the selling price of and interest rate on certain other senior notes expected to be issued by XM in connection with its merger-related refinancing transactions. The effective yield on the exchange notes will not be less than 13.92% per annum. In the event that XM issues less than $150 million aggregate principal amount of other senior notes in connection with its merger related refinancing transactions, the effective yield on the exchange notes will not be less than 15% per annum.

The senior notes expected to be issued by XM will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Nothing in this press release should be construed as a solicitation of an exchange or offer to purchase, or an offer to sell, any of XM's or XM Satellite Radio Holdings Inc.'s securities. Any offer to exchange, purchase or sell any of XM's or XM Satellite Radio Holdings Inc.'s securities will be made only upon the terms and conditions set forth in an offering document related thereto.

About XM

XM is America's number one satellite radio company with more than 9.3 million subscribers. Broadcasting live daily from studios in Washington, DC, New York City, Chicago, Nashville, Toronto and Montreal, XM's 2008 lineup includes more than 170 digital channels of choice from coast to coast: commercial-free music, premier sports, news, talk radio, comedy, children's and entertainment programming; and the most advanced traffic and weather information.

XM, the leader in satellite-delivered entertainment and data services for the automobile market through partnerships with General Motors, Honda, Hyundai, Nissan, Porsche, Ferrari, Subaru, Suzuki and Toyota, is available in 140 different vehicle models for 2008. XM's industry-leading products are available at consumer electronics retailers nationwide. XM programming is also available through XM Radio Online, the exclusive home on the Internet for XM's commercial-free music channels; as downloads of original XM shows via podcasts from XM's Web site or the Apple's iTunes Store; and as streams of commercial-free XM music channels to AT&T and Alltel wireless customers through XM Radio Mobile. For more information about XM hardware, programming and partnerships, please visit http://www.xmradio.com/.

This communication contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the results of XM's second quarter operating results and other statements identified by words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "will," "should," "may," or words of similar meaning. Such forward-looking statements are based upon the current beliefs and expectations of XM's management and are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those contemplated by such forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements in this press release include demand for XM Satellite Radio's service, the Company's dependence on technology and third party vendors, its potential need for additional financing, as well as other risks described in XM Satellite Radio Holdings Inc.'s Form 10-K filed with the Securities and Exchange Commission on 2-28-08. Copies of the filing are available upon request from XM Radio's Investor Relations Department. All programming subject to change.

SOURCE XM Satellite Radio Holdings Inc.

http://www.xmradio.com

New York-based Sirius offers 69 music channels and 65 channels of sports, news, talk, entertainment, traffic, weather and data for a monthly subscription fee of $12.95.

Sirius Internet Radio is an Internet-only version of the firm's radio service, while its Sirius Backseat TV is live, in-vehicle rear seat entertainment product featuring three channels of children's programming, including Nickelodeon, Disney Channel and Cartoon Network.

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"I am recommending that with the voluntary commitments they've offered, on balance, this transaction would be in the public interest," Martin said in a statement.

Analysts viewed Martin's endorsement increasing the likelihood that the merger will receive regulatory approval.

"On balance, we believe the merger will go through," Citigroup analyst Tony Wible wrote to clients Monday. "To reflect Martin's approval and the fact that the FCC is starting to show some direction, we now assign a 90% probability that SIRI and XMSR will unite," he said.

Wible noted that Martin is the "key 'swing' vote" since the five-member commmission comprises two appointed republicans and two democrats.

As part of the merger, the two companies have agreed to a number of conditions recommended by Martin.

These conditions include a cap on prices, preventing price increases for at least 36 months after the deal closes, and making smaller packages available at lower prices.

The companies will also adopt an open standard for radios and sell devices that are interoperable between both XM and Sirius services. These will be available within a year of closing, according to Martin.

The two companies will also offer up to an additional 8% of public interest programming -- 4% of the channels will be for noncommercial use and 4% for "qualified entities who have not been traditionally represented," Martin said.

Other stipulations include an open standard for manufacturing radios, so that anyone can make and sell satellite radios off the shelf at a retailer.

There are also plans to make the service available in Puerto Rico, where neither company currently offers services.

Citigroup's Wible sees the spectrum concessions, under which XM and Sirius give up 8% of their combined spectrum, as the one obstacle "that could torpedo the deal." Advocates and public interest groups want the combined company to give up to 20% of air space for public interest programming, Wible said.

However, the analyst noted that the 8% of spectrum the companies agreed to concede represents only 0.3% of the combined listener base, "which gives us increased confidence that the concessions will be accepted."

He backed a buy rating on Sirius and raised his price target to $9 from $7.50. Wible also raised his XM target price to $12.75 from $12.

Cowen and Co. analyst Tom Watts viewed the news positively, saying the terms are better than expected. Watts had expected the companies would have to give up 10% of their spectrum, and noted the 8% was "much better than the 20% that some parties had sought."

Following Martin's recommendation to approve the merger, Watts said two more votes are needed to garner FCC backign, which he expects will come by the end of next week. "We continue to expect approval and near-term outperformance," he wrote. Another hurdle to cross is bond holder approval, but he said their agreement is likely.

Watts backed an outperform rating on XM Satellite Radio, but noted that in order to support the near-term stock price increases, management will have to back its "free cash flow by 2010" guidance.

Meanwhile, Wachovia analyst Jeff Wlodarczak backed his market weight rating on the satellite radio sector, reminding investors that the companies "still need full FCC approval."

He said the valuations look "rich" in an industry that seems to have priced in more than 31 million subscribers, although there were only 18 million by the end of the first quarter. And even if a deal goes through, as now appears likely, the company will need to raise capital, which may be difficult to do in the current environment.

"We continue to believe sat radio cost structures and business models need to be right-sized for a market that is significantly smaller than the companies originally anticipated," Wlodarczak wrote. "While merger approval at this point appears to be an inevitability, a roughly $11 billion combined company enterprise value already reflects a very rosy scenario in our view."

Shares of the two for-pay radio companies, which opened higher after reports of Martin's backing of the deal surfaced over the weekend, rose recently. Shares of XM Satellite Radio Holdings last traded 5% higher at $11.40. Sirius Satellite Radio added 6% to $2.66.

Michelle Rama mr/vj/mr

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Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.

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"I am recommending that with the voluntary commitments they've offered, on balance, this transaction would be in the public interest," Martin said in a statement.

As part of the merger, the two companies have agreed to a number of conditions recommended by Martin.

These conditions include a cap on prices, preventing price increases for at least 36 months after the deal closes, and making smaller packages available at lower prices.

The companies will also adopt an open standard for radios and sell devices that are interoperable between both XM and Sirius services. These will be available within a year of closing, according to Martin.

The two companies will also offer up to an additional 8% of public interest programming -- 4% of the channels will be for noncommercial use and 4% for "qualified entities who have not been traditionally represented," Martin said.

Other stipulations include an open standard for manufacturing radios, so that anyone can make and sell satellite radios off the shelf at a retailer.

There are also plans to make the service available in Puerto Rico, where neither company currently offers services.

Shares of the two for-pay radio companies, which opened higher after reports of Martin's backing of the deal surfaced over the weekend, rose 6% in morning trading. Shares of XM Satellite Radio Holdings last traded at $11.56. Sirius Satellite Radio last traded at $2.67. Michelle Rama mr/vj

COPYRIGHT

Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.

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