Traders Are Betting Sears Will Be the Next Big Retailer to Fail
The 129-year-old company, which has lost $7 billion over the past four years, is trying to avoid the fate of RadioShack Corp., another once-iconic retailer that filed for bankruptcy protection this month.
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Billionaire Eddie Lampert’s quest to revive Sears Holdings Corp. is looking dubious to credit-swaps traders.
It now costs more to insure against a Sears default for a year than for five years, a dynamic that indicates traders anticipate a credit event such as a default in the near term. The relationship was reversed as recently as last month, according to prices compiled by CMA in the privately negotiated market for credit swaps.