On January 17, 2018, S&P Global Ratings lowered its corporate credit rating on Sears Holdings Corporation to CCC- from CCC and its second-lien secured debt rating to CCC from CCC+. According to S&P Global, the downgrade follows Sears announcement that it is in discussions with its lenders regarding potential transactions that would modify the agreement terms of more than $1 billion of its non-first-lien debt. The Company is seeking to enhance liquidity and strengthen the balance sheet and the potential transactions would include reducing cash interest payment and extending on some of its debt maturities. If completed, S&P would likely view these loan modifications as distressed and tantamount to a selective default. S&P would reflect its view of potential transactions as distressed because they believe lenders would receive less than the original promise. Read more on distressed companies.
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