TORONTO – Moody’s Investors Service has upgraded Sirius Satellite Radio Inc.’s probability of default rating to Caa3 from Ca, and revised its ratings outlook to “positive” from “negative”.
The move comes in response to Liberty Media’s offer to invest $530 million in loans to Sirius and its subsidiaries, in exchange for an equity interest in the satellite broadcaster.
Sirius’ corporate family rating, which indicates expected loss, will remain at Ca, and its speculative grade liquidity rating remains unchanged at SGL-4 (indicating poor liquidity), the press release said.
Moody’s downgraded Sirius’ probability of default rating and corporate family rating to Ca from Caa1 in late December, 2008.
In a separate rating action, Moody’s also responded to Sirius’ recent announcement that its wholly-owned subsidiary, XM Satellite Radio Holdings Inc., had exchanged approximately $172.5 million of its $400 million outstanding 10% convertible senior notes due December 2009, for a like amount of newly issued senior secured 10% PIK Notes due 2011. For ratings purposes, it characterizing the transaction as a "distressed exchange."
The company’s probability of default rating was repositioned to Caa3/LD, with the "LD" suffix signaling the limited default that has been deemed to have taken place. The probability of default rating will be repositioned to Caa3 after three business days, the release continued.
