The 2017 bonds closed at 86.6 x 90.81–sporting a yield to worst of 12.23%. There are only sellers in the bonds. The only ones that are firm are the 2015’s. But even those are being offered 4 points under par. Considering they are only two years out and $200 million deep, I find it interesting that they are being bid for at $93.
Why am I harping on JCP?
Well, this is one of those moments in market history that you are going to remember, the absolute and total destruction of a big box retailer–spearheaded by just one man–who arrived with a legacy and will leave in shame.
As the stock price drops, pressure will mount to raise capital. They aren’t going to sell more bonds, so it has to be stock. Just like the banks, circa 2008, prepare for a massively dilutive secondary, as management tries to shore up the balance sheet.
Until then, I will remain short. Even more, I will add to my short position on any spike.
I closed the day out down 0.15%, led by a lift in AG (I am short) and small declines in USG, WNC and BX. BZH curbed my losses.