Other rating actions were announced for General Motors Co. (NYSE: GM), Liberty Media LLC, Lubrizol Corp., now wholly-owned by Berkshire-Hathaway Inc. (NYSE: BRK-A; BRK-B), ConAgra Foods Inc. (NYSE: CAG), Orbitz Worldwide Inc. (NYSE: OWW), Web.com Group Inc. (NASDAQ: WWWW), and Cummins Inc. (NYSE: CMI)

General Motors Co. (NYSE: GM) is having its ‘Ba2′ corporate family rating and its ‘Baa3′ secured credit facility ratings reviewed for possible upgrade at Moody’s. The company’s new union contract and its improved operating and financial performance are the drivers of the review. Global economic uncertainty and the cyclic nature of the automaking business are the agency’s biggest concern. Also today, S&P assigned ‘AAA’ ratings to $500 million in asset-backed notes for Ally Bank. The funds are primarily intended to finance purchases of new cars from GM and Chrysler.

Liberty Media LLC and its Liberty Starz Group (NASDAQ: LSTZA; LSTZB) and Liberty Capital Group (NASDAQ: LCAPA; LCAPB) have received a ratings downgrade from Moody’s on senior unsecured bonds from ‘B1′ to ‘B3′ and the probability of default rating was downgraded from ‘Ba3′ to ‘B1′. The downgrades follow a court ruling that allows Liberty Media to split-off certain assets. The agency noted that 18% of Liberty Media’s revenues and 37% its enterprise value are being removed, which “disproportionately and negatively affect Liberty Media’s bondholders.”

Berkshire Hathaway Inc. (NYSE: BRK-A; BRK-B) subsidiary Lubrizol Corp. received a ratings upgrade from Moody’s following its acquistion by Warren Buffett’s company. The agency raised Lubrizol’s debt ratings from ‘Baa1′ to ‘Aa2′ with a stable outlook. There’s no substitute for having access to really deep pockets, or as Moody’s says, Berkshire-Hathaway “now guarantees Lubrizol’s public debt.”

ConAgra Foods Inc. (NYSE: CAG) has had its ‘BBB’ corporate credit and its ‘A-2′ short-term and commercial paper rating, among others, re-affirmed by S&P following ConAgra’s decision to give up its attempts to acquire Ralcorp Holdings Inc. (NYSE: RAH). All the company’s ratings have been removed from CreditWatch and the ratings outlook has been declared stable.

Orbitz Worldwide Inc. (NYSE: OWW) has had its ‘B’ corporate credit rating put on CreditWatch with negative implications by S&P. The agency downgraded debt for Travelport Holdings Ltd. yesterday, which together with The Blackstone Group (NYSE: BX) owns 55% of Orbitz.

Web.com Group Inc. (NASDAQ: WWWW) received a preliminary rating of ‘B’ with a stable outlook from S&P on its corporate credit.

Cummins Inc. (NYSE: CMI) received a corporate credit upgrade from ‘BBB+’ to ‘A’ from S&P. Cummins is an engine and parts maker and has been performing above expectations for the past three quarters. Analysts have raised EPS estimates for the current quarter by 10%.

Paul Ausick

The company will also have Game Show Network, FUN Technologies and the three regional sports networks. Liberty Entertainment Inc. will now be comprised of:

• approximately 54% of the common stock of DIRECT;
• Liberty Sports Holdings, which owns three regional sports networks;
• a 65% interest in Game Show Network (GSN) and FUN Technologies;
• approximately $30 million in cash in addition to cash generated by operations after March 31;
• $2 billion in debt.

DIRECTV will provide to LEI up to $650 million in funding pursuant to a term loan facility in order to service the LEI debt.

In the split-off, each holder of Series A Liberty Entertainment group tracking stock will receive 0.9 of a share of LEI Series A common stock and will retain 0.1 of a share of Liberty Starz stock; each holder of Series B Liberty Entertainment group tracking stock will receive 0.9 of a share of LEI Series B common stock and will retain 0.1 of a share of Liberty Starz stock for each share of Series B Liberty Entertainment group tracking stock held at the time of the split-off.

LEI and DIRECTV Group (DTVG) will merge with subsidiaries of a newly formed subsidiary of DTVG that will be called DIRECTV. DIRECTV will become the parent company of DTVG and LEI. DIRECTV will have two classes of stock, Class A which will be entitled to one vote per share and Class B which will be entitled to 15 votes per share. In the DTVG merger, DTVG shareholders will receive one share of DIRECTV Class A common stock for each share of DTVG common stock held. The holders of LEI Series A and Series B common stock (other than John Malone, his wife and associated trusts) will receive 1.1111 shares of DIRECTV Class A common stock for each share of LEI Series A or Series B common stock held. John Malone, his wife and associated trusts will receive 1.1111 shares of DIRECTV Class B common stock for each share of LEI Series B common stock held.

This has been a very confusing story for years.  The new structure does not seem that much less complicated on the surface.  We have heard of many shareholders who have refrained from investing in the Liberty companies because they have had too hard of a time determining what they really own in each class of stock.  And after reading the above scenarios it may be good to ask yourself if the structure sounds easy to explain now……..

JON C. OGG

Under terms of the deal,  Malone’s Liberty will invest in Sirius XM.  The satellite radio provider and its lenders have also agreed to extend its outstanding loans which are due in May.

These transactions “should” resolve resolve the uncertainty over the company’s and its subsidiaries’ debt that is maturing in 2009.  The company says this DOES resolve it, but we argue it SHOULD resolve it.

Sirius XM also announced that the term loan and revolving loan for  XM Satellite Radio, a subsidiary of Sirius XM,  been rolled into a single term-loan facility of $350 million.

Liberty will loan $150 million to XM Satellite Radio to repay a portion of the  10% convertible notes due December 1 issued by its former corporate parent.  Sirius XM has granted Liberty 12.5 million shares of new preferred stock convertible into 40% of the common stock of Sirius XM.

Saying a $0.13 or $0.14 stock was “allowed to live” is a misnomer.  This company is living on life support and may be in a coma.  There are still many issues ahead for Sirius XM, and the shaky economy and plummeting auto sales  is just a small piece of the pie.

Sirius XM shares are up more than 6% today to $0.1384.

Jon C. Ogg
March 6, 2009

It sold more than 1.3 millionshares at the very end of 2008.  A filing today showed another 344,000shares were sold off at prices of between $15.96 to$16.14.

This is so far not an exit from the stock.  That would take fartoo a high toll on Liberty.  It also still hasplenty of skin in the game with almost 27.2 million shares remainingafter the last filing.

This follows steady selling since the end of 2008.  It seems that BarryDiller’s victory over John Malone came with a price.

The Malone structure is complicated.  if you want to know which stock is which, here is a list:

• Liberty Media Interactive (NASDAQ: LINTA),
• Liberty Media Corporation (NASDAQ: LINTB),
• Liberty Media Corporation (NASDAQ: LMDIB),
• Liberty Media Capital (NASDAQ: LCAPA),
• Liberty Media Corporation (NASDAQ: LCAPB)

Jon C. Ogg
January 6, 2009