S&P Global has downgraded Toys R Us debt further into junk territory, citing concerns that the retailer may address maturing bonds at less than par and implement a more extensive restructuring of its debt load.

The downgrade of Toys’ corporate credit rating to ‘CCC+’ from ‘B-‘ follows media reports that the company has hired the law firm Kirkland & Ellis to advise on a restructuring, with bankruptcy one possible outcome.

Toys is facing $440 million of debt maturities in 2018 followed by $2.6 billion in 2019. It took on more than $5 billion in debt to finance its $6.6 billion leveraged buyout in 2005 by an investor group led by KKR, Bain Capital, and Vornado Realty Trust.

S&P also put all Toys’ ratings on CreditWatch with negative implications, leaving it at risk of a further downgrade.

“The downgrade reflects our view that the company may choose to address certain 2018 maturities at less than par or engage in a broader restructuring,” the rating agency said in a news relese.

While S&P does not currently expect such a restructuring, it said the incentives to a timely refinancing of the 2018 debt maturities at par are “now lower, given the apparent drop in the price of the unsecured debt due in 2018.”

“With 2019 maturities looming and a lack of clear prospects for improving operating performance, we believe Toys’ capital structure may be unsustainable in the long term,” S&P added.

Toys successfully refinanced some of its debt just a year ago. But as CNBC reports, “it has become increasingly difficult for leveraged retailers to tap the refinancing market, as lenders have become spooked by the increasing number of retail bankruptcies.”

Toys’ disappointing 2016 holiday season carried over into the spring as it reported a net loss of $164 million in the fiscal first quarter of 2017, up from $126 million a year earlier. Same-store sales have fallen for three straight quarters.

“Toys R Us is evaluating a range of alternatives to address our 2018 debt maturities, which may include the possibility of obtaining additional financing,” a spokeswoman said.

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