The ratings on Dallas-based Blockbuster Inc. reflects our view that performance will remain very challenged and our concern that Blockbuster will not be able to transform its business model over the near term, as we had expected, given the competitive pressures in the rapidly evolving domestic media entertainment industry. In addition, we expect credit protection measures will remain very weak. Although the company has cash balances, if the movie studios were to tighten credit terms or require upfront cash payments, we estimate that Blockbuster's liquidity would be severely constrained in the second half of fiscal 2010. In the company's recent Form 10-K filing Blockbuster's management indicated that it may file for Chapter 11 bankruptcy protection. In addition, the company indicated
