SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Schedule 13G Under the Securities Exchange Act of 1934 (Amendment No. 2)* CD Radio Inc. (Name of issuer) Common Stock (Title of Class of Securities) 125127100 (CUSIP Number) *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Page 1 of 6 Pages CUSIP No. 125127100 13G Page 2 of 6 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON MacKay-Shields Financial Corporation 13-2631681 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) (b) Not Applicable 3 SEC USE ONLY 4 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware (United States) NUMBER OF 5 SOLE VOTING POWER SHARES Not Applicable BENEFICIALLY 6 SHARED VOTING POWER OWNED BY 1,230,928 EACH 7 SOLE DISPOSITIVE POWER REPORTING Not Applicable PERSON 8 SHARED DISPOSITIVE POWER WITH 1,230,928 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,230,928 10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES* Not Applicable 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 8.9% 12 TYPE OF REPORTING PERSON* IA SCHEDULE 13G SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Under the Securities Exchange Act of 1934 ITEM 1 (a) Name of Issuer: CD Radio Inc. ITEM 1 (b) Address of Issuer's Principal Executive Offices: 1001 22nd Street, N.W. Washington, DC 20037 ITEM 2 (a) Name of Person Filing: MacKay-Shields Financial Corporation ITEM 2 (b) Address of Principal Business Office: 9 West 57th Street New York, NY 10019 ITEM 2 (c) Citizenship: United States ITEM 2 (d) Title of Class of Securities: Common Stock ITEM 2 (e) CUSIP Number: 125127100 ITEM 3. If this statement is filed pursuant to Rules 13d-1 (b), or 13d-2(b), check whether the person filing is a: (a) [ ] Broker or Dealer registered under Section 15 of the Act (b) [ ] Bank as defined in section 3(a)(6) of the Act (c) [ ] Insurance Company as defined in section 3(a)(19) of the Act (d) [ ] Investment Company registered under section 8 of the Investment Company Act (e) [X] Investment adviser registered under Section 203 of the Investment Advisers Act of 1940 (f) [ ] Employee Benefit Plan, Pension Fund which is subject to the provisions of the Employee Retirement Income Security Act of 1974 or Endowment Fund; see section 240.13d-1 (b)(1)(ii)(F) Page 3 of 6 Pages SCHEDULE 13G cont. (g) [ ] Parent Holding Company, in accordance with section 240.13d-l(b)(ii)(G) (Note: See Item 7) (h) [ ] Group, in accordance with section 240.13d-1 (b)(1)(ii)(H) ITEM 4. Ownership. If the percent of the class owned, as of December 31 of the year covered by the statement, or as of the last day of any month described in Rule 13d-l(b)(2), if applicable, exceeds five percent, provide the following information as of that date and identify those shares which there is a right to acquire. (a) Amount Beneficially Owned: 1,230,928 shares of common stock which may be acquired upon conversion of preferred stock. (b) Percent of Class: 8.9% (c) Number of shares as to which such person has: (i) sole power to vote or to direct the vote Not Applicable (ii) shared power to vote or to direct the vote 1,230,928 (iii) sole power to dispose or to direct the disposition of Not Applicable (iv) shared power to dispose or to direct the disposition of 1,230,928 ITEM 5. Ownership of Five Percent or Less of a Class. If this statement is being filed to report the fact that as of the date hereof the reporting person has ceased to be the beneficial owner of more than five percent of the class of securities, check the following [ ]. Not Applicable Page 4 of 6 Pages SCHEDULE 13G cont. ITEM 6. Ownership of More than Five Percent on Behalf of Another Person. If any other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such securities, a statement to that effect should be included in response to this item and, if such interest relates to more than five percent of the class, such person should be identified. A listing of the shareholders of an investment company registered under the Investment Company Act of 1940 or the beneficiaries of employee benefit plan, pension fund or endowment fund is not required. Clients of the filing investment manager have the right to receive and the ultimate power to direct the receipt of dividends from, or the proceeds of the sale of, such securities. The interest of The MainStay Funds, a registered investment company, relates to more than 5% of the class. ITEM 7. Identification and Classification of the Subsidiary Which Acquired the Security Being Reported on By the Parent Holding Company. If a parent holding company has filed this Schedule pursuant to Rule 13d-1(b)(ii)(G), so indicate under Item 3 (g) and attach an exhibit stating the identity and the Item 3 classification of the relevant subsidiary. If a parent holding company has filed this schedule pursuant to Rule 13d-1(c), attach an exhibit stating the identification of the relevant subsidiary. Not Applicable ITEM 8. Identification and Classification of Members of the Group. If a group has filed this schedule pursuant to Rule 13d-1(b)(ii)(H), so indicate under Item 3(h) and attach an exhibit stating the identity and Item 3 classification of each member of the group. If a group has filed this schedule pursuant to Rule 13d-1(c), attach an exhibit stating the identity of each member of the group. Not Applicable Page 5 of 6 Pages SCHEDULE 13G cont. ITEM 9. Notice of Dissolution of Group Notice of dissolution of a group may be furnished as an exhibit stating the date of the dissolution and that all further filings with respect to transactions in the security reported on will be filed, if required, by members of the group, in their individual capacity. See Item 5. Not Applicable ITEM 10. Certification By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were acquired in the ordinary course of business and were not acquired for the purpose of and do not have the effect of changing or influencing the control of the issuer of such securities and were not acquired in connection with or as a participant in any transaction having such purpose or effect. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: February 13, 1998 Signature: /s/ Jeffry B. Platt Name/Title: Jeffry B. Platt, General Counsel Page 6 of 6 Pages