STOCK MARKET WATCH -- Thursday, 12 January 2012

[DemReadingDU]

26. Sears Noose Tightens As CIT Leaves Company Cold With No Vendor Financing

1/12/12 Sears Noose Tightens As CIT Leaves Company Cold With No Vendor Financing

Two weeks ago, when we first announced the catastrophic earnings preannouncement by Sears we noted that we were stunned "that as part of its preannouncement, Sears has decided it would be prudent to provide an update on its credit facility status as well as availability. As a reminder to anyone and everyone - there is no more sure way of committing corporate suicide than openly inviting the bear raid which always appears whenever the words "revolving credit facility" and "availability" appear in the same press release. Just recall MF Global. And here, as there, we expect shorting to death to commence in 5...4...3..."

Subsequently, when the company was downgraded to triple hooks S&P we said that "Accounts Receivable about to become one big perpetition charge off", the implication naturally being that the company is about to lose its vendor financing - which for retailers is the last step before outright default. Sure enough, the WSJ reports that this is precisely what happened. "Struggling Sears Holdings Corp. suffered another setback when a large lender said it would no longer finance loans to suppliers awaiting payment from the company.

more...
http://www.zerohedge.com/news/sears-noose-tightens-cit-leaves-company-cold-no-vendor-financings


and I see we link to smileys



edit to add link to WSJ

1/12/12 Sears Suffers Setback as Large Lender Balks
Struggling Sears Holdings Corp. suffered another setback when a large lender said it would no longer finance loans to suppliers awaiting payment from the company.

Sears representatives played down the decision by CIT Group Inc., the largest U.S. provider of what are known as factoring services for vendors, saying the payables the firm had financed amounted to only about 5% of the retailer's inventory.

"We disagree with their action, in fact we'd point out that other factors are approving shipments to Sears Holdings," company spokesman Chris Brathwaite said in a statement.

http://online.wsj.com/article/SB10001424052970204257504577155701896978594.html?mod=googlenews_wsj