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Fitch rates Sears loan B
Fitch Ratings said it assigned a rating of B with a recovery rating of RR1 to Sears Holdings Corp.'s proposed $1 billion first-lien senior secured term loan due June 2018.
The new term loan is being issued under the company's existing second-amended and restated credit agreement dated April 8, 2011, which currently provides for a $3.275 billion asset-based revolving credit facility due 2016.
The agency also said it affirmed the company's long-term issuer default rating at CCC, $3.275 billion secured bank facility at B with a recovery rating of RR1 and $1 billion first-lien term loan at B with a recovery rating of RR1.
The company's $1.24 billion second-lien secured notes rating was downgraded to B- with a recovery rating of RR2 from B with a recovery rating of RR1.
Also affirmed included Sears, Roebuck and Co.'s long-term issuer default rating at CCC, along with Sears Roebuck Acceptance Corp.'s long-term issuer default rating at CCC, short-term issuer default rating at C, commercial-paper rating at C, $3.275 billion secured bank facility at B with a recovery rating of RR1 and senior unsecured notes at CCC with a recovery rating of RR4.
Kmart Holding Corp.'s long-term issuer default rating also was affirmed at CCC, along with Kmart Corp.'s long-term issuer default rating at CCC and $3.275 billion secured bank facility at B with a recovery rating of RR1. Sears DC Corp.'s long-term issuer default rating also was affirmed at CCC.
Post this transaction, Sears will have fully exhausted its ability to issue first-lien debt under this agreement, but would still have the ability to issue $760 million in second-lien debt, the agency said.
The outlook is negative.
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