Fitch Ratings on Oct. 15 downgraded Sears Holdings Corp.'s long-term issuer default rating to D from CC after the struggling retail chain filed for Chapter 11 bankruptcy protection earlier the same day.

The agency said Sears had $5.7 billion in total debt outstanding as of the petition date. The company will remain open through the holiday season after a bankruptcy court in New York authorized Sears to access its $300 million in senior priming debtor-in-possession financing from its senior secured asset-based revolving lenders.

Fitch said that Sears' top-line weakness indicates years of underinvestment in stores, tightening competition, inconsistent merchandising execution and the lack of a long-term retail strategy.

It also said it expects the company's bankruptcy to affect some of its direct competitors, as well as U.S. mall traffic. Fitch said large-scale closures will likely accelerate tenant type evolution in malls, but smaller malls without re-tenanting activity might face productivity declines or even closures.

In addition, Fitch said that Sears' liquidation sales during the holiday season at the 144 locations slated for closure could have a modest negative impact on other large retailers in the near term. In the longer term, the agency expects much of Sears' revenue to be captured by other retailers.