Moody's lowers RadioShack notes to Caa3

Moody's Investors Service said it downgraded RadioShack Corp.'s corporate family rating to Caa2 from Caa1 and probability of default rating to Caa2-PD from Caa1-PD.

In addition, the agency lowered the senior unsecured notes to Caa3 from Caa2.

The outlook remains negative.

RadioShack's speculative grade liquidity assessment was lowered to SGL-3 from SGL-1.

"The continuing negative trend in RadioShack's sales and margins has resulted in a precipitous drop in profitability causing continued deterioration in credit metrics and liquidity," Moody's senior analyst Mickey Chadha said in a news release. "The turnaround strategy put in place by the new management doesn't seem to be gaining much traction and it is unclear whether the closure of 1,100 stores announced by the company will result in stabilizing margins and reducing cash burn."

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