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Moody's downgrades Sears
Moody's Investors Service said it lowered Sears Holdings Corp.'s corporate family and probability of default ratings to B3 from B1.
The outlook remains negative.
At the same time Moody's affirmed Sears' speculative grade liquidity rating at SGL-2.
Moody's said the action reflects its expectations that Sears will report a significant operating loss in fiscal 2011. Sears recently announced that it anticipates adjusted EBITDA for the fiscal fourth quarter will be less than half of last year's result.
The rating action also reflects the company's persistent negative trends in sales, which continue to significantly underperform peers.
"We believe these trends are a result of continued underinvestment in stores and service and we expect negative trends are likely to persist into fiscal 2012," Moody's vice president Scott Tuhy said in a news release.
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