Sears Swaps Soar to Record as CIT Said to Halt Vendor Loans
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The cost of protecting Sears Holdings Corp.’s debt from losses surged to a record following reports that suppliers will no longer be able to get loans or payment guarantees from CIT Group Inc. for their shipments to the retailer.
Credit-default swaps on Hoffman Estates, Illinois-based Sears jumped 7.6 percentage points to 42 percent upfront as of 5 p.m. in New York, according to data provider CMA. That’s in addition to 5 percent a year, meaning it would cost $4.2 million initially and $500,000 annually to protect $10 million of Sears’s debt.