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Analysts question company's long-term solvency
RETAIL Blockbuster Inc.'s stock hit all-time lows last week after rival Movie Gallery projected a 10 percent drop in same-store revenue for the third quarter.
Moody's Investors Service reportedly downgraded Gallery's long-term debt ratings, citing concerns over the chain's operating performance over the next 12 months following the impact of Hurricane Katrina and an overall rental industry- decline.
The news prompted analysts and financial experts to question Big Blue's long-term solvency and wonder whether the company was renegotiating covenants on about Si billion in long-term debt - speculation the company denied.
'It is not true.* said spokesperson Randy Hargrovr. "We are not engaged in renegotiation...