Standard&Poor's upgrades Blockbuster

NEW YORK (AP) — Standard&Poor's Ratings Services said Wednesday it raised its corporate credit rating on Blockbuster Inc. to "B-" from "CCC."

Both ratings are non-investment grade, also known as "junk." The outlook is stable, S&P said.

The ratings agency also assigned a "B'' rating to the company's $675 million senior secured notes.

"The upgrade reflects our estimation that the refinancing enhances the company's liquidity profile and is likely to improve operating flexibility," said Standard&Poor's credit analyst David M. Kuntz in a statement.

Blockbuster said earlier this week it may close as many as 960 stores by the end of next year, which would leave it with about 20 percent fewer U.S. stores.

S&P said it believes that Blockbuster's long-term success is "highly dependent on its ability to adapt to a market that is increasingly subject to changes in technology and is less dependent on in-store rentals."

Separately, Moody's Investors Service said it placed Blockbuster Inc.'s "Caa2" corporate family rating, "Caa3" probability of default rating and "Ca" senior subordinated notes on review for possible upgrade.

Shares of Dallas-based Blockbuster rose 11 cents, or 8 percent, to $1.48 in after-hours trading. The stock hadclosed down 3 cents at $1.37 in the regular session.