GO
Loading...

JCPenney to sell 84 million shares of stock

CNBC.com with Reuters
Thursday, 26 Sep 2013 | 5:14 PM ET
Adam Jeffery | CNBC

JCPenney said it will sell 84 million shares of stock in a secondary offering.

Shares fell 5 percent following the news. (What's the stock doing now? Click here for the latest after-hours quote.)

The retailer said it would use the proceeds for general corporate purposes.

Penney shares fell 15 percent on Wednesday after Goldman Sachs said it expects the retailer's sales to improve more slowly than expected. The stock rebounded slightly Thursday.

JC Penney: No need to raise capital
JC Penney CEO Mike Ullman says he is "pleased with progress in the company's turnaround efforts," and "vendors are very supportive." Rick Snyder, Maxim Group; Jan Kniffen, Worldwide Enterprises CEO; and CNBC contributor Herb Greenberg, discuss.

The cost for insurance against a J.C. Penney default has shot back to near record-high levels over the last week.

The company, which has a "CCC " credit rating from Standard & Poor's, reflecting a substantial risk in owning its debt, has about $2.6 billion of outstanding bonds.

The company's benchmark 5-year credit default swap contract price surged by more than 13 percent on Wednesday, according to Markit data.

The cost to insure $10 million of J.C. Penney bonds against a default for five years now requires an upfront payment of about $2.2 million plus quarterly payments of about $300,000 for the duration of the contract. The contract's pricing reflects a default probability of nearly 65 percent.

  Price   Change %Change
JCP
---

Featured

Contact Retail

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Consumer