iHeartCommunications firm in two issues after Q4 results; Community Health trek continues; Denbury down

By Colin Hanner

Chicago, Feb. 23 – A handful of issues were firm in the distressed market on Thursday, traders said, due in part to reaction from quarterly earnings that tended to be positive. Outside of the movers, activity tended to be quiet, a market source said.

Media and entertainment company iHeartCommunications, Inc. was “better on numbers,” a trader said, referring to the quarterly figures released by its parent company iHeartMedia, Inc. on Thursday. Two issues were solidly up on the session, while one straggled and went out “sideways” on a possibility that the company would restructure its debt to avoid bankruptcy.

An issue of Community Health Systems, Inc. traded on heavy volume and moved up marginally on the day, two sessions after the hospital operator announced its fourth quarter results.

Petroleum and natural gas exploration and production company Denbury Resources Inc.’s distressed bonds were up even though the company announced mixed results.

Intelsat SA continues to trade higher as it prepares to announce results next week, Murray Energy Corp. was up a round number as it teeters back-and-forth between gains and losses session-to-session and a handful of distressed companies, including Neiman Marcus Group, Inc., traded mixed on the session.

Hearty gains

Solid fourth quarter results – including revenue and operating income growth – propelled a pair of iHeartCommunications’ distressed notes up on the session, traders said.

Included in that were the 9% notes due 2021, which were up 1¼ points to 81, a trader said, while the 9% notes due 2019 were up 1 point to 87¼, a market source said.

“In general, the market reacted positive to [iHeart’s] earnings,” a trader said.

Bucking the positive trend were the 14% notes due 2021, which were a “bit sideways,” a trader said, citing the possibility of a restructuring of certain debt. The notes were down 3/8 point to 39¾.

According to a 10-K filing with the Securities and Exchange Commission, iHeartCommunications is considering a “global restructuring” of all of its outstanding debt

If the company is unable to complete the restructuring, it may need to file for bankruptcy, the filing added.

Included would be the company’s senior secured credit facilities, its priority guarantee notes, its legacy notes and its senior notes due 2021.

Outside of restructuring the company’s debt, other possibilities under consideration are refinancings, exchange offers, consent solicitations, issuance of new debt, amendments to the terms of existing debt and other transactions, according to the filing.

Community Health up

Seeing a “lot of trades,” Community Health Systems saw its fourth-straight session of positive gains for one of its most popular issues, the 6 7/8% notes due 2022.

The bonds saw muted movement compared to prior sessions and were up ½ point to 87 1/8, a trader said.

Upticks in the bonds started on Friday when the company announced an asset sale of eight hospitals and followed it up with positive earnings results on Tuesday when the market resumed.

Denbury on the up

In line with expectations, Denbury Resources’ fourth quarter results helped lift the company’s distressed bonds on Thursday.

The 5½% notes due 2022 were up 3 points to 85½, the trader said.

In the opposite direction, a market source said the 6 3/8% notes due 2021 were up 2¼ points to 90¾.

Denbury reported a $385.7 million loss in the quarter, breaking down into a 99-cent loss per share.

Speaking to investors, Philip M. Rykhoek, president and chief executive officer of Denbury Resources, said that sufficient liquidity, low bank debt and long-dated maturities on outstanding debt – making refinancing unnecessary in the short-run – have kept trading levels higher on bonds.

Intelsat ‘trending higher’

Intelsat Jackson Holdings SA caught a bulk of activity in the afternoon, a trader said, particularly the 7¼% notes due 2020, which were up 1 point to 86.

Another trader said the notes were up ½ point to similar levels.

Murray on the up

A market source said private coal company Murray Energy’s 11¼% notes due 2021 were between sideways movement and marginal firmness on Thursday’s session.

He said the notes went out with an 80½ to 81 context, sideways on the day, though he added that they did touch below 80 on Wednesday and said there was probably a ½-point increase on the session.

Another trader said they were up 1 point to 80½.

Market movers

Two issues of retailer Neiman Marcus Group were “trending a little better” on the session, a market source said.

The 8% notes due 2021 were trading with a 59 handle, which were “sort of ticking up a bit,” a trader said.

Seeing similar gains were the 8¾% notes due 2021, which were up 1¼ points to 54¼.

Pharmaceutical company Valeant Pharmaceuticals International, Inc.’s 6 1/8% notes due 2025 were unchanged at 81, a trader said.

Global shipper Navios Maritime Holdings, Inc.’s 7 3/8% notes due 2022 were up 1¼ points to 76.

Two issues of FirstEnergy Corp. were down after the electricity company announced it would either close or sell its nuclear power plants, as well as consider filing for bankruptcy.

The company’s 6.05% notes due 2021 were down 2 points to 36, while the 6.80% notes due 2039 were down ½ point to 35½, a trader said.

E&P company California Resources Corp.’ 8% notes due 2022 were up 3/8 point to 87 7/8.

And geoscience company CGG SA’s 6½% notes due 2021 were up ¼ point to 48¼.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.