RPT-Fitch Solutions: Sears CDS Climb 39%, Now Lag JC Penney
Jan 15 (Reuters) - (The following statement was released by the rating agency)
Credit default swaps (CDS) on Sears Roebuck Acceptance Corporation (Sears) have widened 39% over the past month, according to Fitch Solutions.
Sears CDS significantly underperformed the 9% CDS tightening for the broader North America Retail CDS Index over the same time period. Additionally, the cost of Sears credit protection has climbed to levels not seen in nearly two years. 'Worsening sentiment for Sears is likely attributed to disappointing holiday sales and a lowered forecast for the fourth quarter,' said Director Diana Allmendinger.
Meanwhile, CDS liquidity for Sears is now trading in the second global percentile. 'After pricing consistently tight relative to JC Penney during the latter half of last year, CDS on Sears are now trading 90 basis points wider than credit protection for JCP,' said Allmendinger.
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