Fitch downgrades Linens 'n Things

Fitch Ratings said it downgraded Linens 'n Things, Inc.'s asset-based revolving credit facility to B+ with a recovery rating of RR2 from BB-/RR1 and its senior secured notes to CCC/RR6 from B-/RR4. The B- issuer default rating was affirmed.

The outlook remains negative.

The agency said the downgrade reflect Linens 'n Things' weaker-than-expected operating results for the year to date and the challenges associated with re-positioning the company's business. The success of the turnaround plan is uncertain in the face of intense competition from other specialty retailers, discounters and department stores. Total adjusted debt to EBITDAR was 7.9 times at July 1

Despite the weakness of the operating results, Fitch said the affirmation of the issuer default rating reflects the adequate liquidity available to meet the company's near-term capital and debt service requirements.

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