-Sears (NASDAQ:SHLD) has "significant default risk" over the next 12-24 months due to high levels of debt and years of weak store traffic, TheStreet reports, citing a new report from Fitch Ratings.
-Fitch notes that SHLD must repay ~$2.8B in high yield bonds and institutional term loans coming due in the next few years.
-Earlier this month, Moody's cut its speculative-grade liquidity rating on SHLD to SGL-3 from SGL-2, reflecting the likelihood that the company will continue to need outside financing to stay in business.
-A SHLD reorganization or liquidation could crush Seritage Growth Properties (NYSE:SRG), whose portfolio of 266 retail properties includes 170 leased to Sears and another 82 to Kmart; ~79% of SRG's rental income this year comes from Sears.