Moody's rates Sirius loan B1

Moody's Investors Service said it assigned a B1 (LGD1, 5%) rating to Sirius Satellite Radio, Inc.'s new $250 million 51/2-year senior secured term loan facility and affirmed Caa1 corporate family rating and speculative grade liquidity rating at Caa1 and SGL-2, respectively.

The agency also downgraded the probability-of-default rating to Caa1 from B3 and the company's 9 5/8% senior notes due 2013 to Caa2 (LGD4, 60%) from Caa1 (LGD4, 65%).

The outlook is developing.

Moody's anticipates that proceeds from the term loan facility will be used to bolster the company's liquidity position.

The ratings reflect Sirius' continued cash burn, lack of sustained free cash flow generation, sizeable fixed costs and the continued competition from XM Satellite Radio and other sources of media.

The ratings benefit from the company's significant subscriber growth and differentiating programming and content, the agency said.

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