JCP - J.C. Penney Buys a 30-Day Breathing Space but Risks Default by Delaying $12 Million Payment
Squeezed between declining revenue and $4 billion in debt, J.C. Penney (NYSE: JCP) bought itself some additional time to explore its alternatives by declining to pay the $12 million interest due on its 2036 bonds today. The company's activation of a 30-day grace period means it doesn't immediately default on the obligation, but it will if it fails to pay the interest within the next 30 days.
The move comes just hours after anonymous but closely involved sources indicated that the department store company may be about to declare Chapter 11 bankruptcy. In sharp contrast, it paid its April store rent to landlords while many other retailers have asked for deferments. J.C. Penney has been floundering for years in the face of online retailers' competition, but the coronavirus derailed its turnaround plans.
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