Fitch lowers Kodak

Fitch Ratings said it downgraded Eastman Kodak Co.'s issuer default rating to CC from CCC, senior secured revolving credit facility to B/RR1 from B+/RR1, senior secured second priority debt to B-/RR1 from B+/RR1 and senior unsecured debt to C/RR5 from CC/RR5.

The outlook is negative.

The downgrades reflect the company's recent draw on its credit facility, which likely signifies weaker-than-expected cash flow in the second-half of 2011, according to the agency.

Fitch said a weak macro-environment, insufficient scale in the company's key growth initiatives, continued secular decline in traditional film and moderating, but still elevated component costs, will hurt the company's seasonally strong second-half, resulting in cash flows below historical levels.

Potential proceeds from the sale of some of the company's patent portfolio in the absence of an improvement in free cash flow will not materially improve the company's credit profile, the agency said.

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