J.C. Penney term loan sees mixed results as Pershing Square sells off company's stock

By Sara Rosenberg

New York, Aug. 27 - J.C. Penney Co. Inc.'s term loan was seen by some traders as slightly higher, by others as slightly lower and yet by others as flat in trading on Tuesday as news surfaced that Pershing Square Capital Management LP is selling its stake in the company.

Specifically, one trader was quoting the term loan at 97½ bid, 98 offered, up an eighth of a point on the day.

"Had both buyers and sellers today in the loan, but it hasn't done much. Basically just hanging in there," the trader remarked.

A second trader, however, was seeing the loan at 97 bid, 98 offered, down from 97¼ bid, 98¼ offered on Monday.

And yet a third trader was quoting the term loan at 96½ bid, 97½ offered, unchanged on the day.

Pershing sells stock

Late Monday, William A. Ackman's Pershing Square Capital filed a 424B7 with the Securities and Exchange Commission announcing plans to sell its roughly 39.1 million shares of J.C. Penney common stock, which is a 17.7% ownership stake in the company.

On Tuesday morning, the stock sale priced at $12.90 per share. On Aug. 23, J.C. Penney's stock was $13.50 per share.

The offering is expected to close on Friday, and J.C. Penney will not receive any of the proceeds from the sale.

Ackman's exit from J.C. Penney's stock comes on the heels of his Aug. 12 resignation from J.C. Penney's board of directors.

J.C. Penney is a Plano, Texas-based operator of department stores.

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