J.C. Penny Company, Inc.
The Law of Large Numbers-Spending to Prosperity
We suggest that distressed debt and yield hungry investors take a look at the junk bond debt of J.C. Penny with the belief that eventually this old line retailer can get a break and turn it's situation around. J.C. Penny debt has sold off due to the many uncertainties regarding their ability to turn the company right side up. A Chapter 11 Bankruptcy does not seem to be in the cards in the immediate future but is possible.
We feel out sized returns could be available for investors with a short to medium time horizon. Bonds maturing in less than seven years are:
Short Term High Yield J.C. Penny Debt
$500 million 5.875 due 7/1/23 (Senior Secured) price 83
$400 million 8.625 due 3/15/25 price 51.5
Stephen P. Vlahos
Performance Plus Advisors. Inc.