trovato questo del September 25, 2013 at 11:36am di highyieldbond.com
Debt backing J.C. Penney was on the decline for a third consecutive session after press reports that the struggling retailer is in talks to possibly raise more cash. More negative bias today stems from pessimistic Street research on the credit, and JCP shares traded down 14%, to $10.23, for a net 22% decline week over week.
In corporate bonds, the 5.65% notes due 2020 dropped five points, to 72/74, while the long-tenor 6.375% bonds due 2036 gave up six points, to 65/67, according to sources. In trading, the 6.875% notes due 2015 were lower by one point, with prints at 93.25, for a net two-point decline on the news, while 7.95% notes due 2017 changed hands at 89.5, for a net three-point fall this week, trade data show.
Over in loans, the J.C. Penney TLB due 2018 (L+500, 1% LIBOR floor) shed 1.75 point, to 95.5/96, for a net 3.5-point decline on the reports, according to sources.
Five-year CDS in the name widened roughly 17% this morning, to 20.813/22.125 points upfront, according to Markit. That’s fully 42% wider on the news, or essentially $597,000 more upfront, at roughly $2.15 million at the midpoint, in addition to the $500,000 annual payment, to protect $10 million of the retailer’s corporate bonds in the event of default.
Bloomberg News reported late Friday afternoon that Goldman Sachs is advising the company on additional fundraising options, which it said include borrowing against its real-estate holdings. The report noted that discussions with hedge funds and other investors are at an early stage, citing unnamed sources. The report flagged both Glenview Capital Management and Hayman Capital Management as recently upping their stakes in J.C. Penney this month. Additionally, Reuters reported that the company could potentially look to raise cash through a combination of debt and equity.
Fresh press reports this morning highlighted that a Goldman Sachs research report circulated with lower targets for debt valuation based on an expectation for more debt as a liquidity buffer. Moreover, the report flagged “bankruptcy,” albeit prematurely, according to a Barron’s blog, which detailed the Goldman research and utilized a classic “falling knife” idiom in reference to the share pricing.
The $2.25 billion covenant-lite TLB was syndicated in May via Goldman Sachs, Barclays, J.P. Morgan, Bank of America Merrill Lynch, and UBS; it was issued at 99.5. Proceeds were used to fund a tender offer for the company’s 7.125% notes, and are available to fund ongoing working capital requirements and general corporate purposes. Corporate ratings are CCC+/Caa1. – Staff reports
