Kohl’s lower ahead of earnings; Mallinckrodt quiet following earnings; Endo softens

By Cristal Cody

Tupelo, Miss., Aug. 15 – Retail paper was in focus on Monday with several issuers scheduled to post second-quarter earnings results, including Walmart Inc. on Tuesday and Kohl’s Corp. on Thursday.

Kohls’ 5.55% senior notes due 2045 (Baa2/BBB-) were down about 1½ points on Monday in the 75½, 76½ bid context, a source said.

The 10% second-lien notes due 2029 (Caa2/CCC) that Mallinckrodt plc issued in connection with its emergence from Chapter 11 bankruptcy in June were quiet after sinking more than 10 points on Friday to the 47 bid area, a source said.

The drop followed Mallinckrodt’s announcement that its second-quarter losses more than doubled from a year ago.

The U.S. junk default rate could hit 1% this month, according to a Fitch Ratings report released Monday.

The top market concern default rate has been steady at 0.8% since May but “could rise to 1% by the end of August if Endo International files for bankruptcy along with The Geo Group Inc. and Ahern Rentals Inc. completing distressed debt exchanges,” Fitch said.

Endo International plc’s notes softened on Monday as the grace period for a missed bond payment was set to expire over the session.

Subsidiary Par Pharmaceutical Inc.’s 7½% senior secured first-lien notes due 2027 (Caa2/CC) dipped ¼ point to 84¼ bid, a source said.

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