S&P World Scores downgraded Mattress Bathtub & Past’s credit standing additional into junk territory on Monday, and mentioned the outlook is detrimental, that means it may downgrade once more within the close to time period. The company minimize its ranking to CCC from B-minus because the retailer faces rising challenges, together with poor gross sales, shrinking liquidity and looming debt maturities. “We consider macro circumstances are worsening and prospects for residence items gross sales proceed to deteriorate,” the company mentioned. “Different retailers have indicated a big, fast decline in discretionary purchases throughout retail, and we consider BBBY will stay vulnerable to additional declines.” The detrimental outlook “displays the danger the corporate may default on its debt or pursue a restructuring within the coming 12 months if its turn-around efforts don’t acquire important traction,” mentioned S&P. “The corporate has burned money however
retains entry to its ABL, and we consider, with low buying and selling costs on its
unsecured notes, there may be the potential for under par retirement of its notes,
which we’d possible think about a distressed trade.” Mattress Bathtub & Past shares had been down 3.4% and have fallen 27% within the 12 months so far, whereas the S&P 500
SPX,
-2.14%
has fallen 11%.