American Tire notes drop after bankruptcy news; Mallinckrodt weakens amid competition

By James McCandless

San Antonio, Oct. 4 – Traders saw a pullback from recent gains in distressed trading amid negative news on Thursday.

After months of languishing, American Tire Distributors, Inc.’s notes dropped after the company declared bankruptcy Thursday morning.

The 10¼% notes due 2022 lost 4¾ points to close at 22 bid.

In the medical space, Mallinckrodt plc’s issues fell in reaction to news that a competitor received FDA approval for a generic version of one of the company’s most popular products.

The 4¾% notes due 2023 dropped 3¼ points to close at 82½ bid.

Competitor Praxair, Inc. received FDA approval for a generic version of neonatal respiratory aid Inomax, one of Mallinckrodt’s most popular products.

Elsewhere in the sector, Community Health Systems, Inc.’s paper moved lower.

The 7 1/8% paper due 2020 shaved off about ½ point to close at 87½ bid. The 6 7/8% notes due 2022 dropped 1 point to close at 55 bid.

A pullback in oil futures tied to worries about supply led to losses in recent gainers Ensco plc, California Resources Corp. and Sanchez Energy Corp., though EP Energy Corp. saw an unexplained jump.

Propane name Ferrellgas Partners, LP’s tranches continued a negative trend spurred by a bad fourth-quarter earnings report.

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