Moody's upgrades Expedia

Moody's Investors Service said it upgraded Expedia, Inc.'s corporate family and probability-of-default ratings to Ba1 from Ba2, upgraded its $500 million senior unsecured notes due 2018 and $500 million senior unsecured notes due 2016 to Ba1 (LGD4, 56%) from Ba2 and affirmed its speculative-grade liquidity rating at SGL-1.

The outlook is stable.

The agency said the upgrade is based on Expedia's solid operating performance amidst the global recession and management's commitment to more conservative financial policies.

Expedia's Ba1 rating is supported by the company's leading position in the consumer online travel agency market and strong credit profile, which includes low leverage, high profitability and strong cash flow generation, Moody's said.

The rating is constrained by reduced travel demand during the current economic recession, historically aggressive financial policies with regard to share repurchases, exposure to ongoing competition from supplier-owned and other third-party online travel sites and the concentrated voting control of Barry Diller and Liberty Media, the agency added.

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