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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: StanX Long who wrote (47330)	5/28/2001 10:27:08 PM
From: StanX Long	Read Replies (1) \| Respond to of 70976

"investors to brace for more bad news" Saturday May 26, 4:49 pm Eastern Time Economy Casts Pall Over Retailers' Bonds By Dena Aubin "NEW YORK (Reuters) - The stock market may be warming to U.S. retailers, but bond analysts are telling investors to brace for more bad news. One key concern: a pile of debt that could end in downgrades or defaults as worries about the economy cut into sales. ``Some retailers have struggled even during the best of economic times to maintain their market position,'' said Moody's Investors Service in a recent research report. ``Turning businesses around or reducing debt to a more reasonable level will become more challenging as the economy slows.'' Many retailers will be ill-prepared for a downturn because the economic boom masked their problems, Moody's said. ``We've seen through the '90s that even the companies that were weaker operators or had flawed strategies were able to grow sales and earnings,'' Moody's Managing Director Angela Jameson said in an interview." . . . Saks Inc. (NYSE:SKS - news), Dillard's Inc. (NYSE:DDS - news), J.C. Penney Co. (NYSE:JCP - news), Office Depot Inc. (NYSE:ODP - news) and Winn-Dixie Stores Inc. (NYSE:WIN - news), among others, have seen their ratings slashed to junk territory over the last 12 months. More will likely follow. Of the 115 retailers Moody's rates, 37 have negative outlooks or are on review for downgrade. . . . Some retailers are well-positioned even if the economy tips into a recession, Jameson said. They include Wal-Mart Stores Inc. (NYSE:WMT - news), Home Depot Inc. (NYSE:HD - news), Costco Wholesale Corp. (Nasdaq:COST - news), Target Corp. (NYSE:TGT - news) and Kohl's Corp. (NYSE:KSS - news), she said. ``They have strong market positions, they connect well with consumers and they're offering the type of merchandise consumers want at the prices they want,'' she said. . . . Many struggling retailers may not be able to issue commercial paper to meet their working capital needs for the third and fourth quarter, CreditSights.com said in a recent report. That is because of conditions in the commercial paper market, where investors have become wary of lower-rated paper. Retailers that have to depend on bank lines instead may have to pledge assets as security, leaving bondholders in a subordinated role, the research firm said. biz.yahoo.com.