S&P cuts RadioShack to D

Standard & Poor's said it lowered its corporate credit rating on RadioShack Corp. to D from CCC-.

The agency also lowered all issue-level ratings on the company's debt issues to D. The recovery ratings on the company's debt issues remain unchanged. The recovery rating on the company’s senior unsecured notes remains 6, indicating an expectation of negligible (0-10%) recovery of principal.

The action follows the company's filing of a petition under Chapter 11 of the U.S. Bankruptcy Code.

S&P said the D rating reflects RadioShack’s default due to its filing voluntary petitions for Chapter 11 bankruptcy protection. As part of the process, the company signed a purchase agreement to sell 1,500 and 2,400 stores to General Wireless Inc. (an affiliate of Standard General LP, which, through other affiliates, is a lender to the RadioShack). General Wireless has agreed in principal with Sprint to create a “store within a store.”

The company expects to close its remaining store base.

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