Daily News: October 7, 2014

Fitch: RadioShack’s New Financing Plan a Short-Term Respite

Fitch Ratings said RadioShack’s announcement that Standard General and certain other investors have replaced GE Capital as the lead lender under its $585
million senior secured ABL credit facility does provide near-term liquidity, it believes the risk of restructuring, including a distressed debt exchange, that is detrimental to bondholders remains high over the next several months given the material deterioration in liquidity and no visible signs that RadioShack can turn operations around.

Fitch said, in addition, RadioShack needs to meet certain conditions to maintain the new credit facility and convert the $120 million investment into equity; meeting all the hurdles is likely to be challenging.

Fitch has the following ratings on RadioShack:

  • Long-term Issuer Default Rating (IDR) ‘C’
  • $585 million senior secured ABL revolver ‘CCC/RR1′;
  • $250 million secured term loan ‘CCC-/RR2′;
  • Senior unsecured notes ‘C/RR6′.
  • To read the entire Fitch Ratings report, click here.