Sirius-XM upsets Moody’s

Cash-strapped sat-radio broadcaster Sirius-XM is issuing 108.1m new shares. The company’s shareholders have already authorised the creation of new stock in an attempt to improve its cash position.

The new shares will be issued in exchange for Sirius-XM’s convertible notes originally due for repayment in 2009. Sirius-XM had some $1bn in debt falling due in 2009, the first element due in February. Perhaps more worrying for the market is the additional $2.2bn of debt still outstanding and not helping Sirius-XM’s miserable share position, down 96% during the last year.

The new share issuance led to an immediate downgrade from Moody’s Investor Services, to a negative outlook. Moody’s said in a statement that "the rating actions anticipate that Sirius will be unable to repay or refinance its maturing debt without negotiating some sort of compromise arrangement with at least a portion of the affected constituents."