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RETAILING

Times Staff and Wire Reports

S&P; Lowers Kmart Bonds: The Troy, Mich.-based retailer suffered a new blow to its turnaround effort when Standard & Poor’s Corp. lowered the retailer’s bond rating to junk status. Kmart Corp. called the move “excessively severe.” S&P; said it was taking the action because Kmart has lost significant market share to rivals such as Wal-Mart Stores Inc. and the Target chain of Dayton Hudson Corp. The news came one day after Kmart announced it had reached agreement with all its banks and other lenders to restructure $548 million of real estate debt. Under previous provisions, these lenders could have forced Kmart to repay the debt once its credit rating fell to the junk level. Wall Street analysts feared that would have forced Kmart to seek bankruptcy protection. Kmart said that because of the new bank agreements, it does not expect S&P;'s action to have any immediate effect. Shares of the company fell 62.5 cents to $7.


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