S&P bumps up rating on Sirius XM

NEW YORK (AP) — Standard&Poor's Ratings Service bumped up the corporate credit rating on satellite radio company Sirius XM Radio Inc. one notch on Tuesday, based on a recent $530 million bailout by Liberty Media Corp.

The agency raised the junk-territory rating to "CCC+" from "CCC" and raised the issue-level ratings also by one level, but kept the company's senior unsecured notes at "CCC-."

Analyst Hal Diamond cited "increased comfort with the company's near-term liquidity needs" after Liberty Media loaned the company money in exchange for preferred stock convertible into 40 percent of Sirius' common shares.

Diamond noted the investment pushed significant debt maturities from 2009 to 2011.

Despite the company's "substantial debt load" and historically large losses, Diamond said he believed Sirius XM could achieve operating cost savings, though it may be challenged to meet its target of exceeding $300 million in operating profits in 2009.

Sirius shares fell a penny to 35 cents on Tuesday.

The New York-based company said last month that it lost $248.5 million in the three months ended Dec. 31, compared with a loss of $405 million in the year-earlier quarter.

Sales, adjusted for the July 2008 combination of Sirius and XM Radio, climbed to $644.1 million from $577.5 million a year earlier, better than analyst expectations.