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J.C. Penney, J. Crew’s Billions in Loan Debt Spark Scrutiny by Fitch Ratings

J.C. Penney Corp. Inc. and J. Crew Group Inc. are among the businesses under scrutiny on Fitch Ratings’ “top loans of concern” list, where 18 percent of companies under fire hail from the retail sector.

According to credit ratings agency Fitch, Penney’s appeared on its list, published in its U.S. Leveraged Loan Default Insight report, for the first time in July.

Penney’s has $1.57 billion outstanding, with a due date of June 20, 2022. The mass-market retailer earlier this month said that it has “no significant debt maturities due in the near term, and we continue to maintain a strong liquidity position.” The chain is said to be in talks with advisors about its debt restructuring options.

Joining Penney’s as new additions in July, and ranking higher than Penney’s by loan amount, were Serta Simmons Bedding LLC at $2.40 billion due Oct. 1, 2021, Revlon Consumer Products Co. at $1.72 billion due on April 17, 2020, and Frontier Communications at $1.71 billion due March 15, 2024.

In the overall list of top loans of concern, Serta heads the listing, with Revlon rounding out the top five. Revlon is followed by Frontier and Penney’s. J. Crew trails Penney’s on the list, saddled with $1.37 billion in outstanding loans. Other apparel and retail-related companies farther down the list include: Toms Shoes LLC, at $299.0 million in loans outstanding; Iconix Brand Group Inc., $171.4 million; and NYDJ Apparel LLC, $100.0 million.

Fitch also documented Tier 2 loans of concern, with retail representing 22 percent of the total amount. This list includes Neiman Marcus Group Inc., $2.25 billion in loans outstanding, and Ascena Retail Group Inc., $1.37 billion. And while Neiman was on Fitch’s default watch list, the luxury retailer in June completed a distressed debt exchange.