J.C. Penney ratings downgraded by Moody's

NEW YORK Moody's Investors Service is cutting its long-term ratings for J.C. Penney (JCP) one step lower into non-investment of junk grade status.

Moody's lowered the department store chain's corporate family and probability of default ratings to "B3" from "Ba3." The outlook is "negative."

Moody's says the downgrades reflect its expectation that J.C. Penney's fourth-quarter profitability will take a big hit as a result of the need to clear excess inventory.

Combined with continued sales declines in the fourth quarter, J.C. Penney will end up with significantly lower profits and ultimately a 2012 credit profile that warrants an even lower "Ca" rating, Moody's says.

Earlier this month, J.C. Penney reported a wider-than-expected third-quarter loss on a revenue drop of nearly 27 percent.

Comments

Market Data

Watch CBSN Live

Watch CBS News anytime, anywhere with the new 24/7 digital news network. Stream CBSN live or on demand for FREE on your TV, computer, tablet, or smartphone.

Watch Now

Market News

Stock Watchlist

New Android App

For your Android phone and tablet, download the FREE redesigned app, featuring CBSN, live 24/7 news.

Download
The all new
CBS News App for Android® for iPad® for iPhone®
Fully redesigned. Featuring CBSN, 24/7 live news. Get the App