NEW YORK (AP) -- Standard & Poor's Ratings Services said Friday that it assigned a "B'' junk-grade status rating to J.C. Penney's new $1.75 billion term loan.
The rating agency also lowered its issue-level rating on the company's unsecured debt to two notches to "CCC-" from "CCC+." S&P also reaffirmed the struggling retailer's "CCC+" junk-grade corporate credit rating.
The outlook is negative, meaning it could be downgraded again in the near future.
J.C. Penney, based in Plano, Texas, has been struggling with weak sales for some time and recent efforts to revitalize the retailer flopped. The company has since appointed a new CEO, but investors remain skeptical.
S&P said that in this highly competitive environment, J.C. Penney may lose market share to other players, such as Macy's, Kohl's or other department stores and off-price retailers, which could hurt the company's performance.
S&P believes there could be further meaningful changes over the next few months as the new CEO reassesses recent changes to the company that have contributed to its performance over the past year. But it said that any changes could take time and it's uncertain if they will stabilize the retailer's operations.
Shares of J.C. Penney Co. Inc. rose 36 cents, or 2.1 percent, to close at $17.72. The stock has lost about half its value since this time last year.
- Professional Services