Moody's analysts say Sears and Kmart don't have enough money — or access to money — to stay in business.

In a note published Wednesday, the analysts downgraded Sears' liquidity rating, saying the company is bleeding cash and will have to continue to rely on outside funding or the sale of assets, such as real estate, to sustain operations.

"We recognize the risks associated with relying on these sources and continued shareholder support to finance its negative operating cash flow which is estimated by Moody's to be approximately $1.5 billion this year," the analysts wrote.

Kmart in particular is at risk of shutting down, according to Moody's.

"The ratings... reflect our view on the uncertainty of the viability of the Kmart franchise in particular given its meaningful market share erosion," the analysts wrote.

Sears said in August that its cash and equivalents have fallen to $276 million from $1.8 billion one year ago.

See the struggling department stores of 2016:



6 PHOTOS Struggling department stores of 2016 See Gallery Struggling department stores of 2016 TORONTO, ONTARIO, CANADA - 2016/03/08: Sears store entrance, is an American chain of department stores. Known for selling high quality clothing article from shoes to shirts. (Photo by Roberto Machado Noa/LightRocket via Getty Images) Macy's Inc. signage is displayed at a department store in New York, U.S., on Monday, Feb. 22, 2016. Macy's Inc., the largest U.S. department-store company, is scheduled to report fourth-quarter 2015 earnings before the opening of U.S. financial markets on February 23. Photographer: Michael Nagle/Bloomberg via Getty Images J.C. Penney Co. signage is displayed outside of a store at the Gateway Shopping Center in the Brooklyn borough of New York, U.S., on Saturday, Aug. 8, 2015. J.C. Penney Co. is scheduled to release earnings figures on Aug. 14. Photographer: Michael Nagle/Bloomberg via Getty Images UNITED STATES - JUNE 09: Customers enter the Dillards department store at Parkdale Mall, in Beaumont, Texas, Wednesday morning, June 9, 2004. A judge declared a mistrial in a lawsuit brought against Dillard's Inc. by 17 black shoppers in Texas who claimed that security guards at the department store chain harassed them because of their race. (Photo by Scott Eslinger/Bloomberg via Getty Images) MIAMI, FL - APRIL 19: A Nordstrom sign is seen outside a store on April 19, 2016 in Miami, Florida. Nordstrom on Monday said in a cost-cutting measure they are expecting to lay off 350 to 400 people. (Photo by Joe Raedle/Getty Images) The sign outside the Kmart store is seen in Broomfield, Colorado November 19, 2009. Sears Holdings Corp posted a narrower-than-expected quarterly loss November 19, 2009, helped by the first increase in same-store sales at its Kmart unit in four years. REUTERS/Rick Wilking (UNITED STATES BUSINESS) Up Next See Gallery Discover More Like This HIDE CAPTION SHOW CAPTION of SEE ALL BACK TO SLIDE

As a result, the retailer was forced to accept $300 million in financing from Sears CEO Eddie Lampert's hedge fund, ESL Investments, in the most recent quarter.

The company is losing cash as sales plunge at its namesake and Kmart stores.

Net sales fell 8.8% to $5.7 billion in the second quarter. Same-store sales plunged 7% at Sears stores and dropped 3.3% at Kmart stores.

Sales have been falling for years.

Sears' sales dropped from $41 billion in 2000 to $15 billion in 2015.

Kmart, which merged with Sears in 2005, has seen its sales plunge from $37 billion to $10 billion in the same period.

Moody's analysts noted that Sears has a sizable asset base, but "its debts are significant with approximately $3.5 billion of funded debt as well as an unfunded pension and post-retirement obligation of $2.1 billion."

The company's minimum pension contributions are an immediate threat to its cash flow. In 2016 and 2017, minimum pension contributions total approximately $596 million, analysts said.

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