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JCPenney Default Risk Spikes To All-Time High; Stock At 30-Year Lows

Submitted by Tyler Durden on 10/03/2013 15:31 -0400

It would appear that the almost $1bn capital raise secondary that JCPenney successfully completed last week - inspite of the lies - has done absolutely nothing to resolve market fears as JCP 5Y CDS surges 80bps to 1280bps (equivalent), a record high (and 1Y protection at 1210bps) and the stock price falls another 3.6% to $8.40 - the lowest since 1982. Just as Goldman had warned, liquidity remains a major concern and anyone who had bought the protection made up their losses on the stock they bought from Goldman on the secondary. The credit markets imply around a 25% chance of default within the year and 70% within 5 years.

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Thu, 10/03/2013 - 15:33 | 4019783 slaughterer

... like JCGov

Thu, 10/03/2013 - 15:33 | 4019790 FieldingMellish

...less risk in JCP...

Thu, 10/03/2013 - 15:49 | 4019926 TruthInSunshine

"There's a pink sheet sale at Pennys!"

Thu, 10/03/2013 - 15:57 | 4019967 Ying-Yang

Ahhhh 1982, that was a good year!

$8.40 for a piece of James Cash Penney toast

Thu, 10/03/2013 - 16:27 | 4020126 jcaz

... Ah, then the CDS is still cheap then...... NO chance they make it thru Jan without BK.......

Thu, 10/03/2013 - 15:33 | 4019794 fonzannoon

if someone does not step up here with JCP there will be tanks on the street and no food on the shelves within hours.

Thu, 10/03/2013 - 15:43 | 4019877 Grande Tetons

Gotta Guess? Another SP cash ramp followed by SP Fut flush?

Thu, 10/03/2013 - 16:05 | 4020015 fonzannoon

hey sorry. I can't guess that short term. My short term is 3 months. I see massive rally. I have been buying stuff with both hands this week. My mid term outlook is one year. It's cloudy. My long term outlook is 2 years plus. I see zombie apacolypse.

Thu, 10/03/2013 - 16:22 | 4020105 Grande Tetons

Good luck, Fonz. No sarc.

Thu, 10/03/2013 - 15:47 | 4019912 NoDebt

"Systemically important retailer"

Thu, 10/03/2013 - 15:35 | 4019797 nugjuice

Amateurs. If I were them I would switch to being a 'green' carbon-efficient Dept. Store. Then I'd come to the gov't with my hands out, palms up.

Thu, 10/03/2013 - 15:39 | 4019830 FieldingMellish

Too bad they didn't morph into a bank. Then they could screw up as much as they wanted doing all manner of illegal shit and they would still be making a profit (thanks to the Fed) while Maria B would be singing their praises all day long.

Thu, 10/03/2013 - 16:01 | 4019983 Ying-Yang

Great business model... biz going downhill?

Morph to a bank, instant credit line at .05%

Sir... may I have another billion?

Thu, 10/03/2013 - 15:39 | 4019844 SHEEPFUKKER