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Fitch downgrades Sears
Fitch Ratings said it downgraded the long-term issuer default ratings on Sears Holdings Corp. and its various subsidiary entities, to CC from CCC.
The agency also downgraded the CCC rating with recovery rating of RR2 to $1.24 billion second-lien secured notes from B- with a recovery rating of RR2.
Fitch also downgraded Sears, Roebuck and Co.’s long-term issuer default rating to CC from CCC.
Sears Roebuck Acceptance Corp.’s long-term issuer default rating also was downgraded to CC from CCC, along with the rating on its $3.275 billion secured bank facility downgraded to CCC+ with a recovery rating of RR1 from B with a recovery rating of RR1, the rating on its $1 billion first-lien term loan downgraded to CCC+ with a recovery rating of RR1 from B with a recovery rating of RR1 and the rating on its senior unsecured notes to CC with a recovery rating of RR4 from CCC with a recovery rating of RR4.
Kmart Holding Corp.’s long-term issuer default rating was downgraded to CC from CCC.
Kmart Corp.’s long-term IDR was downgraded to CC from CCC, along with the rating on its $3.275 billion secured bank facility to CCC+ with a recovery rating of RR1 from B with a recovery rating of RR1 and the rating on its $1 billion first-lien term loan to CCC+ with a recovery rating of RR1 from B with a recovery rating of RR1.
Fitch said it withdrew the long-term issuer default rating on Sears DC Corp.
The magnitude of Sears' decline in profitability and lack of visibility to turn operations around remains a significant concern, the agency said.
The EBITDA for Sears Holdings is expected to be negative $1 billion in 2014 and potentially worse in 2015, after turning negative $337 million in 2013, Fitch said.
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