Moody's drops Sirius

Moody's Investors Service said it downgraded Sirius Satellite Radio Inc.'s probability of default rating and corporate family rating to Ca from Caa1.

The agency said that ratings and loss given default assessments of debt instruments issued by Sirius and its wholly owned subsidiaries, XM Satellite Radio Holdings Inc. and XM Satellite Radio Inc., were adjusted accordingly.

The outlook is negative.

According to Moody's, the company's speculative-grade liquidity rating remains positioned at SGL-4 and with nearly $1.0 billion of its $3.3 billion total debt coming due in the New Year, and given the current background of capital market dislocation and the company's poor liquidity situation, the rating actions anticipate that Sirius will be unable to repay or refinance its maturing debts without negotiating some sort of compromise arrangement with at least a portion of the affected constituents.

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