Moody's Downgrades Sirius
December 24, 2008 at 5:14 AM (PT)
MOODY'S INVESTORS SERVICE downgraded its credit rating for SIRIUS XM RADIO INC. by three notches TUESDAY, expecting the company will have to seek a compromise with debt holders next year.
The ratings agency downgraded the company's probability of default rating to "Ca" from the already non-investment grade "Caa1." The rating outlook is "Negative."
MOODY'S said SIRIUS has nearly $1 billion of its $3.3 billion debt load coming due in 2009. And given the moribund state of capital markets and SIRIUS' "poor liquidity situation," MOODY'S said it expects the company will have to reach a compromise with at least some of its debt holders.
SIRIUS is trimming 22% of its work force by the end of the year, looking to turn a first-ever adjusted profit in 2009. The company still expects a loss in the fourth quarter, though it projects it will shrink to $32 million from $224 million in the year-earlier period.
SIRIUS shares were flat in midday trading TUESDAY at 12 cents.