Moody’s cuts J.C. Penney loans, rates notes

Moody's Investors Service said it affirmed J.C. Penney Co., Inc.'s corporate family rating of B1 rating and also assigned a B2 to J.C. Penney Corp., Inc.’s proposed senior secured second priority notes.

Net offering proceeds are expected to be used to tender for a portion of the company’s senior unsecured notes maturing in 2019 and 2020.

Upon completion of the proposed transaction, the company's senior secured term loan and senior secured notes were downgraded to Ba3 from Ba2 and its ABL revolving credit facility downgraded to Ba2 from Ba1.

The SGL-1 rating was affirmed.

The outlook is stable.

"The proposed transaction will extend J.C. Penney's maturity profile and further support its very good liquidity profile," Moody’s vice president Christina Boni said in a news release.

"Although the company has opportunities for further improvements in merchandising, sourcing and operations, significant headwinds remain for department stores generally with weak mall traffic, and continued market share gains by off-price retailers and online retailers."

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