J.C. Penney Co. and the lenders it is asking to finance a potential bankruptcy are struggling to find sufficient company assets to secure the additional debt, Bloomberg News reported. With inventory going stale in idled stores and real estate valuations slipping amid the coronavirus pandemic, they’re recalculating the value of collateral that secures existing debt, and trying to determine whether the company can back another sizable loan. The company is negotiating with banks supporting its asset-based credit facility and lenders behind its first-lien debt about a bankruptcy loan, Bloomberg previously reported. Options that would avoid a bankruptcy filing altogether are also still being discussed, some sources said. A representative for J.C. Penney, based in Plano, Texas, declined to comment. Management was originally hoping to raise as much as $1 billion. If new collateral can’t be lined up, it could strengthen a faction of creditors who favor liquidating J.C. Penney.
