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A move by J.C. Penney (JCP) to increase its credit facility is proving worrisome to a number of...

A move by J.C. Penney (JCP) to increase its credit facility is proving worrisome to a number of bond analysts. Carol Levenson sums up the nervous vibe: "These hurried actions are not indicative of a financially healthy company."
Comments (4)
  • karmike
    , contributor
    Comments (190) | Send Message
     
    Got news for you Carol, that 4 billion sales loss and negative earnings should give you pause also! 1.8 billion in additional debt would be really tough to overcome, especially if you are not making any money.
    13 Feb 2013, 01:09 PM Reply Like
  • joker
    , contributor
    Comments (102) | Send Message
     
    LOL. That is why you never see a bond analyst making any money - they consistently are afraid the sky is going to fall.

     

    You do know that a credit facility is just like a home equity credit line (what an amateurish comparsion it is :-)). It's not issuing a new bond or any debt. Why you are scared of that?
    13 Feb 2013, 02:15 PM Reply Like
  • karmike
    , contributor
    Comments (190) | Send Message
     
    And what happens if you fail to make payments on the home equity line of credit? It's debt, and in most cases it is accompanied by additional stock issuance further burdening the falling price of ths stock. More debt is not going to make this company more profitable (excuses me, profitable, not more profitable)....Ron Johnson needs to fix the problems that are causing the need for additional credit. I like simple explanations.....it's better than the excuses Ron Johnson keeps spouting LOL.
    14 Feb 2013, 08:40 AM Reply Like
  • retailgirl
    , contributor
    Comments (123) | Send Message
     
    Joker - the thinking you describe and the justifications are why the country went through this God awful recession. No money? Just go extend yourself some credit, hey, how about we borrow on the house? Hey, what could go wrong....right?

     

    Karmike - right on. My suspect is RJ won't stop until he's done us in.
    14 Feb 2013, 09:11 AM Reply Like
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