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S&P lowers Linens 'n Things
Standard & Poor's said it lowered the corporate credit rating on Linens 'n Things Inc. to B- from B and removed the ratings from CreditWatch, where they were placed with negative implications on Nov. 17, 2006. S&P lowered the rating on the company's $650 million floating-rate senior secured notes to CCC.
The outlook is negative.
According to S&P, the downgrade is a result of the company's continued weak operating performance and poor profitability and productivity relative to its key competitor, as well as very high debt leverage and extremely thin interest coverage.
The ratings reflect an extremely leveraged capital structure, thin cash flow protection measures and the highly competitive and fragmented home furnishings retailing industry, the agency said.
The company's lease-adjusted total debt-to-EBITDA climbed to more than 15 times in the quarter ended June 30.
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