Fitch Solutions: Macy's CDS at Widest Level in Three Years

NEW YORK--(BUSINESS WIRE)-- An unseasonably warm autumn is leading out credit default swap (CDS) spreads for Macy's, Inc. to levels not seen since 2012, according to Fitch Solutions in its latest CDS case study snapshot.

Five-year CDS on Macy's widened out 16% over the past week and are now trading 140% wider than they were at the start of the year. As a result, the cost of credit protection on Macy's debt is at its widest levels since July 2012. After pricing consistently in 'BBB+' space for much of the past year, CDS on Macy's are now treading in below investment grade territory.

'In addition to the unseasonably warm weather slowing down winter clothing sales, souring market sentiment for Macy's is likely coming from weaker foot traffic at department stores,' said Director Diana Allmendinger. 'Earnings announced this morning were disappointing with some of the decline attributed to a slowdown in tourist markets, though digital growth is up.'

Fitch Solutions case studies build on data from its CDS Pricing Service and proprietary quantitative models, including CDS Implied Ratings. These credit risk indicators are designed to provide real-time, market-based views of creditworthiness. As such, they can and often do reflect more short term market views on factors such as currencies, seasonal market effects and short-term technical influences. This is in contrast to Fitch Ratings' Issuer Default Ratings (IDRs), which are based on forward-looking fundamental credit analysis over an extended period of time.

Fitch Group is a global leader in financial information services with operations in more than 30 countries. Fitch Group is comprised of: Fitch Ratings, a global leader in credit ratings and research; Fitch Solutions, a leading provider of credit market data, analytical tools and risk services; BMI Research, an independent provider of country risk and industry analysis specializing in emerging and frontier markets; and Fitch Learning, a preeminent training and professional development firm. With dual headquarters in London and New York, Fitch Group is majority owned by Hearst.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151111005952/en/

Fitch Solutions
Diana Allmendinger
Director
+1 212-908-0848
Fitch Solutions, 33 Whitehall Street, New York, NY 10004
or
Media Relations:
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Solutions

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