S&P downgrades Linens 'n Things

Standard & Poor's said it lowered its corporate credit rating on Linens 'n Things Inc. to CCC+ from B- and the company's $650 million floating-rate senior secured notes to CCC- with a recovery rating of 6 from CCC.

The outlook is negative.

The agency said the downgrade reflects ongoing weak operating performance, coupled with an increasingly challenging macroeconomic environment. S&P is also concerned that the company's liquidity position will continue to deteriorate and said Linens 'n Things compares poorly with key competitors, is very highly leveraged and has extremely thin cash flow protection measures.

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