The heavily indebted Barneys New York remains under the credit microscope.

Standard & Poor’s cut the luxe retailer’s corporate credit rating three notches to “CC” from “CCC” after Barneys hired law firm Kirkland & Ellis to help restructure its debt.

The outlook on the rating is negative because an eventual restructuring is likely, the debt watchdog said.

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“The downgrade reflects the hiring of a restructuring adviser and our belief that the company is highly vulnerable to default or selective default, given significant debt maturities in September 2012,” said S&P credit analyst David Kuntz. “We maintain our view that the company will need to restructure its balance sheet.”

S&P said it expects Barneys’ performance to improve along with luxury consumer spending, but that its credit protections metrics would not change meaningfully in the near term.

Barneys is owned by Istithmar, a Dubai investment fund which injected money into the business in the past, but might not do so again. That opens up an opportunity for Ron Burkle, chief executive officer of Yucaipa Cos., and investor Richard Perry of Perry Capital, who have amassed stakes in the company’s debt.

The company has a $200 million revolving credit loan coming due in September as well as a $280 million term loan due in September 2014 and a $300 million payment-in-kind loan due March 2016. Yucaipa owns 38.5 percent of the company’s term loan and 66 percent of its payment-in-kind loan, according to sources.

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