Fitch Solutions: Kohl's CDS Widen 45%, Macy's Outperforms Ahead of Earnings

Credit default swap (CDS) spreads for U.S. retailers are feeling the pinch of late, with some retailers bearing the brunt of market scrutiny more than others, according to Fitch Solutions in its latest earnings commentary.

CDS on Macy's Inc. (reporting today) widened 7% over the past three months. However, Macy's has outperformed the broader North America consumer services sector, which has seen a 20% sell-off. CDS on Macy's are also trading tight of 'BBB-' levels. Though CDS liquidity for Macy's fell one notch, the company is still trading in the third regional percentile. 'Market sentiment for Macy's appears to have improved, but high CDS liquidity is pointing to a still-questionable future amid the sluggish economy,' said Author and Director Diana Allmendinger.

Meanwhile spreads on Kohl's Corporation (reporting tomorrow) widened more dramatically at 45% and are now pricing one notch lower than its recent historical 'A-' trading pattern. Though now trading in 'BBB+' territory and with CDS liquidity slightly higher, 'CDS on Kohl's are pricing well tight compared to Macy's, J.C. Penney and Dillards, indicating that markets remain confident in Kohl's credit prospects,' said Allmendinger.

Briggs & Stratton Corporation (CONSUMER GOODS/Household Goods)

Credit spreads have widened over the last three months, with the five-year point widening from 168 basis points (bps) to 175 bps, an increase of 4%. The liquidity score on Briggs & Stratton Corporation decreased from 8.31 to 8.08 over the three-month period, causing an increase in liquidity from trading in the 45th percentile to the 43rd percentile.

Beazer Homes USA, Inc. (CONSUMER GOODS/Household Goods)

Credit spreads have widened over the last three months, with the five-year point widening from 597 bps to 1172 bps, an increase of 96%. The liquidity score on Beazer Homes USA, Inc. increased from 7.19 to 7.22 over the three-month period, causing a decrease in liquidity from trading in the sixth percentile to the 18th percentile.

Cablevision Systems Corporation (CONSUMER SERVICES/Media)

Credit spreads have widened over the last three months, with the five-year point widening from 323 bps to 395 bps, an increase of 22%. The liquidity score on Cablevision Systems Corporation decreased from 7.88 to 7.77 over the three-month period, causing a decrease in liquidity from trading in the 31st percentile to the 36th percentile.

Computer Sciences Corporation (TECHNOLOGY/Software & Computer Services)

Credit spreads have widened over the last three months, with the five-year point widening from 141 bps to 214 bps, an increase of 51%. The liquidity score on Computer Sciences Corporation decreased from 7.37 to 7.07 over the three-month period, causing an increase in liquidity from trading in the 13th percentile to the 12th percentile.

Dillards Inc. (CONSUMER SERVICES/General Retailers)

Credit spreads have widened over the last three months, with the five-year point widening from 293 bps to 368 bps, an increase of 25%. The liquidity score on Dillards Inc. decreased from 7.62 to 7.6 over the three-month period, causing a decrease in liquidity from trading in the 23rd percentile to the 30th percentile.

Walt Disney Company (The) (CONSUMER SERVICES/Media)

Credit spreads have widened over the last three months, with the five-year point widening from 34 bps to 35 bps, an increase of 3%. The liquidity score on Walt Disney Company (The) decreased from 8.16 to 8.14 over the three-month period, causing a decrease in liquidity from trading in the 40th percentile to the 45th percentile.

Macys, Inc. (CONSUMER SERVICES/General Retailers)

Credit spreads have widened over the last three months, with the five-year point widening from 123 bps to 132 bps, an increase of 7%. The liquidity score on Macys, Inc. decreased from 6.74 to 6.65 over the three-month period, causing a decrease in liquidity from trading in the second percentile to the third percentile.

HCA Inc. (HEALTH CARE/Health Care Equipment & Services)

Credit spreads have widened over the last three months, with the five-year point widening from 357 bps to 535 bps, an increase of 50%. The liquidity score on HCA Inc. decreased from 7.24 to 6.86 over the three-month period, causing an increase in liquidity from trading in the eighth percentile to the seventh percentile.

Hospitality Properties Trust (FINANCIALS/Real Estate)

Credit spreads have widened over the last three months, with the five-year point widening from 154 bps to 181 bps, an increase of 18%. The liquidity score on Hospitality Properties Trust increased from 8.07 to 8.37 over the three-month period, causing a decrease in liquidity from trading in the 37th percentile to the 50th percentile.

Nordstrom Incorporated (CONSUMER SERVICES/General Retailers)

Credit spreads have widened over the last three months, with the five-year point widening from 80 bps to 103 bps, an increase of 29%. The liquidity score on Nordstrom Incorporated decreased from 7.52 to 7.26 over the three-month period, causing a decrease in liquidity from trading in the 18th percentile to the 20th percentile.

Kohls Corporation (CONSUMER SERVICES/General Retailers)

Credit spreads have widened over the last three months, with the five-year point widening from 71 bps to 103 bps, an increase of 45%. The liquidity score on Kohls Corporation decreased from 7.8 to 7.46 over the three-month period, causing an increase in liquidity from trading in the 29th percentile to the 27th percentile.

Liberty Media LLC (CONSUMER SERVICES/Media)

Credit spreads have widened over the last three months, with the five-year point widening from 289 bps to 372 bps, an increase of 29%. The liquidity score on Liberty Media LLC decreased from 7.28 to 6.76 over the three-month period, causing an increase in liquidity from trading in the ninth percentile to the fifth percentile.

MBIA, Inc. (FINANCIALS/Nonlife Insurance)

Credit spreads have widened over the last three months, with the five-year point widening from 940 bps to 1088 bps, an increase of 16%. The liquidity score on MBIA, Inc. decreased from 6.46 to 6.35 over the three-month period, causing a decrease in liquidity from trading in the first percentile to the second percentile.

Avnet, Inc. (INDUSTRIALS/Electronic & Electrical Equipment)

Credit spreads have widened over the last three months, with the five-year point widening from 141 bps to 172 bps, an increase of 22%. The liquidity score on Avnet, Inc. decreased from 7.42 to 7.11 over the three-month period. The regional percentile ranking stayed the same

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