Imperial Capital Expects Further Deterioration to Sears' Asset Value

Imperial Capital has published a research report on Sears Holdings SHLD stating that valuation of real estate and other assets of the company are not currently sufficient to support share prices. In the report, Imperial Capital writes, "We maintain our HOLD rating on the $1.25bn 6.625s senior secured notes due 10/15/18 (6.625s) at a price of 82.50 (8.03% CY; 10.30% YTM) on adequate direct collateral coverage, in our view, and our SELL ratings on the $172.9mn of long-dated senior notes of Sears Roebuck Acceptance Corp. (SRAC) each quoted at 52.50 (approximately 14-16% YTM) as we believe they may continue to trade down on further deterioration in financial performance and risk of potential significant impairment in a restructuring. We think the 6.625s would be attractive in the high-60s/low-70s." Sears Holdings closed yesterday at $44.03.