Plano, Texas J.C. Penney said Tuesday that, despite a circulating analyst’s report to the contrary, there is no reason for concern about its credit facility.
Earlier Tuesday, J.P. Morgan analyst Charles Grom said in a note that the department store operator's credit covenants were likely to be breached without action.
While J.C. Penney did not say its statement is in direct response to Grom’s note, it did announce today that it expects to have more than $2 billion of cash on its balance sheet at the end of fiscal 2008, which ends Jan. 31.
J.C. Penney said it paid a $200 million debt maturity from its cash balances in August 2008 and has no debt maturities during 2009.
The next debt maturity is about $500 million in March 2010, which the company expects to fund from its cash balances.
Its current credit facility has never been used for cash, J.C. Penney said. It matures in April 2010 and the company is currently in discussions with banks to modify or replace the bank line during the first half of 2009.
"There is no basis for any concern about our credit facility," J.C. Penney said in a statement.