Analysts seem split over XM's decision to sell and leaseback XM-4 in an effort to add some coin to the bank.

Bank of America analysts Jonathan Jacoby said XM is now funded until the second half of 2008, when they're expected to turn a profit. On the otherhand, Morgan Stanley analyst Benjamin Swinburne was "mixed" on the deal, saying that this could show XM's opinions about future cash flow as well as on price increases.

"We believe this transaction also likely speaks to management's view on raising prices in 2007," Swinburne said. "We believe Sirius will move to raise rates in 2007, but that XM is less inclined to follow suit."

[Forbes] 

There were rumors of a possible sale-leaseback deal, and they appear to be true. XM Satellite Radio has entered into a sale-leaseback deal with Satellite Leasing LLC, bringing a total of $288.5 million in cash to XM.

The deal, which involves the selling of the XM-4 transponder (not the satellite itself) and subsequently leased back from Satellite Leasing, was finalized yesterday (February 13th) after months of negotiation and prep work. It follows some extensive in-orbit testing of XM-4 in January, and some additional insurance that was placed last week to get the deal to go through.

The sale-leaseback deal allows XM to add some quick liquidity on something that previously was not liquid, as well as to reap the tax benefits of owning the XM-4 satellite itself. XM has already paid off $44 million for outstanding mortgages on their property. The lease term is for 9 years, and XM will retain full operational control over XM-4 during the term. 

[View SEC Filing] 

XM Satellite Radio has filed for a patent that specs out a system for geosynchronous satellites that follow in an elliptical orbit, creating a "figure-eight" ground track.

Some Sirius folks may notice that this orbit pattern looks familiar.

Now before we go getting all up in arms about that this is a possible shift in XM's plans for their satellite configuration. I just want to point out this line from the patent application:

"This application is a continuation of U.S. patent application Ser. 10/171,619, filed Jun. 13, 2002, which is a continuation of Ser. No. 09/433,849, filed Nov. 4, 1999, now issued as U.S. Pat. No. 6,442,385."

So this isn't necessarily anything new, just a patent that XM has been working on for a while and this is simply the continuation of it.

Either way, it's "interesting" to say the least.

[via Satellite Radio Techworld] 

XM Satellite Radio is supposedly negotiating a sale and leaseback deal for their XM-4 satellite, according to UBS analyst Lucas Binder.

The deal could yield up to $300 million in cash for XM and would remove the need for the company to access its revolving credit line. It would also provide liquidity from a previously non-liquid asset, said Binder.

He also said the deal should be structured as a capital lease.

[Barron's Tech Trader Daily via SSG] 

For over half a century since we've been launching ourselves into space, we've been leaving behind space junk (or "orbital debris"). Now the federal list of detectable objects - comprised of dead satellites, spent rocket stages, or whatever else that measures four inches or larger - has reached over 10,000 objects.

What doesn't help is China's test last month using an anti-satellite rocket that destroyed an old satellite into nearly 1,000 detectable pieces at over 18,000 miles an hour. This is chalked up as the worst debris causing event (since 1996 when an abandoned American rocket engine exploded in 713 bits and pieces).

The problem, scientists agree, is that the amount of debris in Earth's orbit has surpassed a critical mass, or "critical spacial density." This is building to a point that it'll kick off a cascade, a chain reaction, where colliding debris smashes into larger objects, creating more debris, reeking havoc in the heavens.

So who cares? Anyone who's business involves launching satellites into space does. While XM's or Sirius' satellites aren't in immediate danger, there's an underlying issue. The theory (know as the Kessler Syndrome) is that as the debris becomes so dense that launching satellites would become harder and harder - and more expensive. The good news? This worst-case scenario is probably centuries away.

[NY Times]