Buddy, can you spare $120 million?


As it waits…and waits…and waits for the FCC to act on its application to merge with Sirius, XM Satellite Radio has had to come up with substantial cash as a financial deadline approached. The company’s multi-year deal with Major League Baseball (MLB) requires it to have $120 million in escrow or otherwise available for the benefit of MLB. That obligation had been covered by a surety bond, but that bond is due to expire June 30th. XM has now come up with $120 million in cash (from cash on hand and $62.5 million of borrowing under its bank facility) and put it into escrow. That’s seen as only a short-term fix, since it reduced the company’s unrestricted cash liquidity, so XM is looking to replace that cash escrow with a letter of credit, surety bond or some other arrangement that doesn’t tie up so much of its cash.