When Liberty Media (NSDQ: LINTA) bailed out Sirius XM (NSDQ: SIRI) Satellite Radio in mid-February with a loan of $530 million, the investment was set up in two phases. The first was completed immediately; the second was dependent on Sirius successfully extending the terms of loans it needs to re-pay by May 2009. Well, it did. And Liberty announced this afternoon that it had closed the second phase of the investment—it now has preferred stock convertible into 40 percent of Sirius’ common stock.

After the intitial announcement last month, Sirius shares doubled (before eventually falling back almost to where they were before the announcement). They didn’t get quite the same bounce today, though they were up 10 percent on the news. That’s probably because the company still has a host of problems to overcome. They include a decrease in consumer spending, the rapid decline of the auto industry (which drives a lot of subscription sales), and more debt coming due in a couple years.

• Sirius Takes Investment From Liberty, Not EchoStar
• 8K Watch: The Fine Print On The Sirius-Liberty Deal
• What Is Liberty’s Endgame With Sirius? Finally, Some Elaboration