J.C. Penney Co. creditors are pushing for discussions on a possible debt swap that would give the company’s new managers more time to turn the struggling retailer around, Bloomberg News reported. Some of the department-store chain’s bondholders are seeking to rework a portion of its $4 billion of debt well ahead of their maturities in an effort to avoid the last-minute brinkmanship that contributed to the bankruptcies of Toys “R” Us Inc., Sears Holdings Corp. and Barneys New York Inc. A possible deal could include swapping second-lien notes into higher-priority debt, giving creditors additional collateral, or compensating investors with higher coupon securities in exchange for extending maturities, said the people, who asked not to be identified discussing private negotiations. The fact that a handful of the J.C. Penney’s creditors are believed to also be sellers of near-term derivatives that protect against default is seen as a key driver in the push for formal talks, which haven’t started yet.
