JCP Bonds Ain't Buying The Bounce

Despite three attempts to defend the company this morning ( 1) forecast, 2) no equity raise, and 3) still paying vendors), JCP shares are fading back from their squeeze highs as the credit markets dismiss all the hope in stocks. With CDS near record wides (implying at least a 60% probability of default), the bottom line remains that cash outflows are as strong as always and now there are no plans to replenish it. The price action does suggest though, as opposed to what management has said, that JCP will attempt a 2nd lien offering (instead of the equity raise) - which would (of course) leave investors questioning management veracity among other things.