CD Radio Closes $200 Million Debt Offering Reaches $1 Billion in Financing.

NEW YORK--(BUSINESS WIRE)--May 18, 1999--

CD Radio Inc. (Nasdaq: CDRD) announced today that it has completed an offering of $200 million of 14 1/2% Senior Secured Notes due 2009, with attached warrants to purchase 2,190,000 shares of CD Radio's Common Stock. A portion of the proceeds will be pledged to pay the first three years of interest on the Senior Secured Notes, with the balance to be used for the construction and launch of CD Radio's satellites and other general corporate purposes.

To date, CD Radio has raised $1 billion in capital. In the past 10 months alone, the Company has raised $575 million. "The funds generated by this offering bring us within 10% of our $1.14 billion pre-operational financing requirement," said David Margolese, CD Radio's chairman and chief executive.

CD Radio is building a digital satellite radio system that will broadcast 100 channels of music and other programming to motorists throughout the United States. The Company plans to offer 50 channels of commercial-free music and 50 channels of news, sports and entertainment programming for a monthly subscription fee of $9.95. Commercial operations are scheduled to commence at the end of the fourth quarter of 2000. The first of the Company's three satellites, which are currently under construction by Space Systems/Loral, is scheduled for launch in January.

The initial purchasers of the securities are Merrill Lynch, Pierce, Fenner & Smith Incorporated, Lehman Brothers Inc., Bear Stearns & Co. Inc., NationsBanc Montgomery Securities LLC and U.S. Bancorp Libra. The securities were offered by the initial purchasers solely to certain qualified institutional buyers pursuant to Rule 144A and to certain institutional accredited investors, have not been registered under the Securities Act of 1933, and may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act.

Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions, future events or performance are not historical facts and may be forward-looking and, accordingly, such statements involve estimates, assumptions and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. Accordingly, any such statements are qualified in their entirety by reference to the factors discussed in CD Radio's Annual Report on Form 10-K for the year ended December 31, 1998. Among the key factors that have a direct bearing on CD Radio's results of operations are the potential risk of delay in implementing CD Radio's business plan; increased costs of construction and launch of necessary satellites; dependence on satellite construction and launch contractors; dependence on Space Systems/Loral, Inc. and Lucent Technologies, Inc.; risk of launch failure; unproven market and unproven applications of existing technology; unavailability of CD Radio receivers; and CD Radio's need for additional financing.