Fitch downgrades Sears, notes

Fitch Ratings said it downgraded the long-term issuer default ratings of Sears Holdings Corp., Sears Roebuck Acceptance Corp. and Kmart Corp. to C from CC following the company's announcement that it began an exchange of various tranches of debt held at these entities.

The agency also downgraded Sears Holdings’ second-lien secured notes to CC/RR3 from CCC+/RR1.

Fitch said the Jan. 23 announcement follows a release from early January in which Sears disclosed that it was in discussions with certain lenders to amend the terms on potentially more than $1 billion of its non-first-lien debt, including significantly reducing cash interest expense and extending the maturity of some of that debt.

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