S&P cuts Blockbuster rating, outlook negative

San Francisco Standard & Poor's Ratings Services has lowered Blockbuster's corporate credit rating to CCC from B-, indicating that the video rental chain is "vulnerable to default."

"The downgrade 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," said S&P credit analyst Jayne Ross. The outlook is negative.