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14 Kmart Leases Downgraded by S&P

TROY, MI-The discount store company's credit rating also drops because of further

By Robert Carr | Updated on November 30, 2001

TROY, MI-Standard & Poor’s has lowered its ratings on 14 Kmart Corp. lease transactions, in conjunction with the agency’s downgrade of the company’s creditrating to BB from BB+. In the credit lease transactions, Kmart or a Kmart subsidiary leases on a triple-net basis most of the properties that secure mortgage notes thatcollateralize the transactions.

In some cases, a Kmart entity is no longer the lessee because of divestitures made by the company over the last few years, but Kmart has provided a guarantee with respect to lease payments and other obligations of the new tenant.

According to S&P, Kmart is the second-largest US operator in the competitive discount department store sector, with more than 2,100 stores throughout the US, including 118 supercenters.

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