PHI notes gain despite negative earnings report; Neiman Marcus issues gain as lawsuit dismissed

By James McCandless

San Antonio, March 19 – The Tuesday session in the distressed space saw a ramp-up in activity with much of Monday’s focus carrying over.

PHI, Inc.’s notes were better despite the company reporting a loss for the fourth-quarter and declaring bankruptcy.

Sector peer Bristow Group Inc.’s issues finished the day slightly lower.

Mixed oil futures were mirrored by Ensco plc’s mixed paper, while EP Energy Corp.’s notes declined, and Halcon Resources Corp.’s issues improved.

Retailer Neiman Marcus Group, Inc.’s paper was positive after a judge dismissed a hedge fund’s lawsuit against the company.

L Brands, Inc.’s notes were also gaining.

Meanwhile, in healthcare, Community Health Systems, Inc.’s issues rose despite negative headlines.

Telecom name Intelsat SA’s paper was mixed.

PHI better, Bristow off

PHI’s notes were gaining in the Tuesday session, traders said.

The 5¼% notes due 2019 rose 2 points to close at 60¾ bid.

After the close on Monday, the Lafayette, La.-based bankrupt offshore transportation name released its fourth-quarter earnings report.

The company showed a loss of 30 cents per share and revenues of $176 million for the period.

In anticipation of $500 million outstanding of the 5¼% notes coming due last Friday, the company decided to file for Chapter 11 bankruptcy.

Houston-based sector peer Bristow’s issues moved lower.

The 6¼% notes due 2022 shaved off ¼ point to close at 21¼ bid.

The company is working to stave off default, obtaining waivers of potential defaults from two loan parties on Monday.

“They’ll probably file when that grace period ends in April,” a trader said.

Oil mixed

Oil futures were mixed, resulting in distressed oil tranches moving in varying directions, market sources said.

London-based contract driller Ensco’s paper closed mixed.

The 7¾% paper due 2026 picked up ¼ point to close at 86¾ bid. The 7.2% paper due 2027 lost 1¾ points to close at 83½ bid.

Houston-based independent oil and gas producer EP Energy’s notes declined.

The 8% notes due 2024 fell 1¾ points to close at 47¾ bid. The 7¾% notes due 2026 dropped 2 points to close at 78½ bid.

The company’s structure has been pushed further into distressed territory after it reported a 13 cents per share loss last week.

Houston based sector peer Halcon’s issues improved.

The 6¾% notes due 2025 added 2¼ points to close at 57¼ bid.

By the end of Tuesday’s session, West Texas Intermediate crude oil futures for April delivery lost 6 cents to close at $59.03 per barrel.

North Sea Brent crude oil futures for May delivery finished at $67.61 per barrel after tacking on 7 cents.

Neiman, L Brands up

Meanwhile, in the retail space, Neiman Marcus’ paper saw a positive day, traders said.

The 8% paper due 2021 picked up ¼ point to close at 55¼ bid.

On Tuesday, a Texas judge dismissed a fraudulent conveyance lawsuit brought against the Dallas-based luxury retailer by hedge fund Marble Ridge.

The judge ruled that Marble Ridge did not have standing to bring the lawsuit in the first place.

The hedge fund alleged that the company had attempted to defraud creditors by transferring e-commerce segment MyTheresa into private equity.

“Neiman had home court advantage here,” a trader said. “They’re a bit freer now to work on getting a deal done with the other creditors.”

Columbus, Ohio-based retailer L Brands’ notes were also gaining.

The 6¾% notes due 2036 picked up ¾ point to close at 83¾ bid. The 5¼% notes due 2028 added ½ point to close at 88¼ bid.

Community Health rises

Elsewhere, in the healthcare space, Community Health’s issues were on the rise despite negative headlines, market sources said.

The 6 7/8% notes due 2022 jumped 2¼ points to close at 66 bid. The 6¼% notes due 2023 edged up ¼ point to close at 93¾ bid.

Late Monday, news broke that two former employees of the Franklin, Tenn.-based hospital operator has accused the name of submitting more than $400 million in false claims to the U.S. Department of Health and Human Services from 2012 to 2015.

The company denies the allegations.

“It’s early days for this, so it’ll take a while to see if this has legs,” a trader said.

Intelsat mixed

In telecom, Intelsat’s paper was mixed, traders said.

Intelsat Jackson Holdings SA’s 5½% paper due 2023 added ¼ point to close at 90 bid. Intelsat (Luxembourg) SA’s 8 1/8% paper due 2023 dropped ¾ point to close at 73½ bid.

The Luxembourg-based satellite operator’s structure has continued to feel pressure as the future of control of the C-band structure remains in doubt.

“There’s still a lot of people invested in them,” a trader said. “There’s just a bit of clarity missing right now that has people jumpy.”

© 2015 Prospect News.
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