RadioShack Corporation -- Moody's says additional liquidity without reduction in cash burn won't change RadioShack's long term prospects

New York, October 07, 2014 -- Moody's Investors Service said today that RadioShack Corporation's (Caa2 negative) announcement that Standard General LP and certain other investors have replaced GE Capital as lead lender under RadioShack's$535 million asset based revolving credit facility (ABL) and $50 million senior secured first lien term loan and that the existing shareholders Standard General LP and Litespeed Management LLC, along with other investors will also provide $120 million in additional liquidity to be used to cash collateralize letters of credit for the company will not by itself solve the company's primary problem which is anemic store traffic, margin erosion and chronic revenue declines. The agreement will buy the company some additional time to implement its turnaround strategy but unless management is successful in stabilizing the company's margins and reverse the precipitous revenue declines we expect the company to find itself in the same precarious position it is in today in less than 12 months.

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