S&P lowers RadioShack

Standard & Poor's said it lowered the corporate credit and senior unsecured debt ratings on RadioShack Corp. to CCC+ from B-.

The outlook is negative.

The recovery rating on the senior unsecured debt remains 4, indicating 30% to 50% expected recovery in a default.

The downgrade reflects that it will be very difficult for the company to improve its gross margin in the fourth quarter of this year, given the highly promotional nature of year-end holiday retailing in the wireless and consumer electronic categories, S&P said.

The agency said it believes that all segments of the company's business will remain under margin pressure for 2012 and into 2013.

The ratings reflect the company's highly leveraged financial risk profile with weaker credit metrics and debt leverage in the 12x range, S&P said.

The ratings also consider its modest cash flow generation and adequate liquidity in the near term, the agency said.

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