SHLDQ - Macy's Risk Rises as Credit Insurers Withdraw Coverage
Two of the world's biggest credit insurers have reportedly stopped writing coverage for Macy's (NYSE: M), increasing the likelihood the retailer will have a more difficult recovery once the coronavirus pandemic passes.
Policies offered by credit insurers protect vendors and suppliers from a customer going bankrupt and being unable to pay. Even in the throes of Sears' (OTC: SHLDQ) last days, it was able to obtain insurance, albeit at exorbitant rates.
Without coverage, terms for payment could change for Macy's, like requiring faster payment for merchandise, which could increase pressure on the company when it attempts to reopen stores, bring back furloughed workers, and continue making payments on its large debt load.