S&P may cut Vornado

Standard & Poor's said it placed the BBB+ corporate credit ratings on Vornado Realty Trust and Vornado Realty LP on CreditWatch with negative implications following the trusts recently disclosed stake in J.C. Penney Co. Inc.

The agency said it understands that Vornado's investment in J.C. Penney shares and related derivative will total about $600 million.

Total cash outlays to date, prior to the settlement of derivative positions, totaled $300 million and were funded with cash on hand, S&P said.

The CreditWatch listing affects about $2.8 billion in rated debt and preferred securities, the agency said.

While Vornado has invested in the securities of other public companies in the past, the strategic implications of this particular investment are unclear at this time, S&P added.

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