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Fitch drops Sears to CCC
Fitch Ratings said it downgraded the long-term issuer default rating on Sears Holdings Corp. and Sears, Roebuck and Co. to CCC from B.
The agency lowered Sears' secured bank facility to B+/RR1 from BB/RR1 and second-lien secured notes to B+/RR1 from BB/RR1.
The outlook is negative.
The downgrades reflect the continued deterioration in EBITDA on worse than expected top-line growth, with both Kmart and Sears running negative mid-single-digit comps in the fourth quarter, according to the agency.
Leverage is expected to be 8 times or more in 2011, up from 4.6x in 2010, versus expectation of leverage rising to a range of 6x to 7x, the agency said.
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