On Aug. 10, 2005, Standard&Poor's Ratings Services lowered its corporate credit and bank loan ratings on Blockbuster Inc. to 'B' from 'BB-' and the subordinated note rating to 'CCC+' from 'B'. Ratings on the Dallas-based company remain on CreditWatch with negative implications, where they were placed on Aug. 3, 2005. The downgrade is a result of Standard&Poor's preliminary rating review following the Aug. 9 release of Blockbuster's second-quarter results and reflects the continuation of extremely weak operating performance due to poor industry fundamentals, the company's decision not to charge late fees, and the high cost related to the rollout of its in-store and online subscription programs. Industry fundamentals for the video rental market are weak, and
