PENNEY’S RATING OUTLOOK NOW STABLE: Moody’s Investors Service has raised the rating outlook for J.C. Penney Co. Inc. to stable from negative.
The ratings agency said the change in outlook was due to the “successful completion of $400 million senior unsecured notes” to fund the partial tendor offers for Penney’s notes due between 2015 to 2017. The stable outlook rating acknowledges Penney’s “good liquidity and lack of near dated debt maturities,” which allows it to address its operating losses.
The retailer’s corporate family rating was affirmed at “Caa1.” Moody’s said that while Penney’s sales and gross margins have improved, its profitability and credit metrics remain weak. “Further improvement is required for J.C. Penney to have a sustainable capital structure,” the agency said. It also noted that the retailer will continue to generate operating losses for the next 12 to 18 months, but that the “level of operating losses will abate further.”