XM Satellite Radio said that plans to issue $300 million of 1.75-percent convertible senior notes due 2009, and it has granted the initial purchaser of the notes the option to purchase as much as $100 million aggregate principal amount of the notes. The notes are non-callable and will be convertible into XM Class A Common Stock at an initial conversion rate of 20 shares per $1,000 principal amount of the notes. The initial purchaser was not immediately disclosed. XM said the proceeds would be used for working capital and for general corporate purposes.