S&P: Pep Boys on watch

Standard & Poor's said it placed its ratings for Pep Boys-Manny, Moe & Jack on Creditwatch with negative implications, following the company's continued disappointing operating performance.

The agency noted sales for the third quarter declined 2.4% year-over-year and trailing 12-month lease-adjusted operating margins deteriorated to 5.7% from 10.5% in 2003 and credit measures weakened significantly.

The ratings may be lowered by one or two notches, S&P said, noting it anticipates resolving the CreditWatch listing following further discussions with management regarding their future operating and financial plans.

Affected ratings include the company's corporate credit rating at B+, senior secured debt at BB-, senior unsecured debt at B+ and subordinated debt at B-.

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