Washington D.C.-based XM Satellite Radio Inc. [Nasdaq: XMSR] took a big step toward gaining the financial breathing room it needed this week by closing on its previously announced $475 million funding package.

The deal consisted of $225 million in new funds from strategic and financial investors and $250 million in payment deferrals and related credit facilities from General Motors [NYSE: GM].

In addition, XM closed an exchange offer for 14 percent senior secured notes due 2010. XM had offered note holders a package of cash and new securities, including new 14 percent senior secured discount Notes due 2009 and warrants to purchase common stock. More than $300 million, representing 92 percent of the outstanding issue of existing notes, were tendered and 25,514,960 warrants, exercisable at $3.18 per share, have been issued to note holders.