On Nov. 11, 2005, Standard&Poor's Ratings Services lowered its corporate credit and bank loan ratings on Blockbuster Inc. to 'B-' from 'B' and the subordinated note rating to 'CCC' from 'CCC+'. At the same time, ratings on the company were removed from CreditWatch, where they were placed with negative implications on August 3, 2005. The outlook is negative. The downgrade is a result of 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. Although the company was in compliance with covenants in its credit facility during the third quarter, it is in
