S&P Places 'D' Rating on RadioShack (RSH) Following Bankruptcy Filing
Standard & Poor's Ratings Services today lowered its corporate credit rating on the Fort Worth, Texas-based RadioShack Corp. to 'D' from 'CCC-'. We also lowered all issue-level ratings on the company's debt issues to 'D'. The recovery ratings on the company's debt issues remain unchanged. The recovery rating on the company’s senior unsecured notes remains a ‘6’, indicating our expectation of negligible
(0-10%) recovery of principal.
The ratings action follows the company's filing of a petition under Chapter 11 of the U.S. Bankruptcy Code.
The 'D' rating on RadioShack reflects the company's default due to its filing voluntary petitions for Chapter 11 bankruptcy protection. As part of the process, the company has signed a purchase agreement to sell 1,500 and 2,400 stores to General Wireless Inc. (an affiliate of Standard General L.P., which, through other affiliates, is a lender to the RadioShack Corp.). General Wireless has agreed in principal with Sprint to create a “store within a store”. The company expects to close its remaining store base.