By  on April 13, 2009

Standard & Poor’s slapped Barneys New York with a debt downgrade Monday, noting the luxe retailer has a deteriorating liquidity position but no financial covenants that cause near-term concern.

S&P cut the firm’s debt to “CCC” from “B-minus,” skipping over the “CCC-plus” rating on the debt watchdog’s scale. The rating indicates the retailer, acquired by Dubai-based Istithmar for over $900 million in 2007, is vulnerable to default. The current rating is eight notches below the line separating investment from speculative or junk status, versus the prior mark’s level at six ticks below it. The outlook remained negative, having moved there from stable last month.

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