21st Century Oncology continues rally; ACE Cash debt drifting down; J.C. Penney, Caesars mixed

By Stephanie N. Rotondo

Phoenix, July 23 – The distressed debt market was moving into higher territory on Wednesday after spending the first part of the week on a downward tilt.

21st Century Oncology Inc. was again in focus for distressed investors. The bonds were hit badly last week, but have been jumping back up this week, albeit on no fresh news.

One trader saw the 8 7/8% notes due 2017 improving half a point to 96¼, while the 9 7/8% notes due 2017 – a subordinated issue that took most of the beating in the previous week – increased by 6½ points to 73.

Another trader pegged the 8 7/8% notes at 96 bid, 97 offered, which he said was “up another point.” The 9 7/8% notes were “up a bunch again today,” seeing that trade into the low-70s.

The company’s debt had started trading down in early July as Medicaid and Medicare said it might slash payouts for radiation therapy equipment. That then resulted in rating agencies taking negative action on the company, given its high percentage of clients who are covered by those programs.

Meanwhile, a trader said ACE Cash Express Inc.’s 11% notes due 2019 were said to be “slipping without any real trades,” according to a trader.

The trader attributed recent weakness in the name to a settlement with the Consumer Financial Protection Bureau earlier this month regarding allegations of shady collections practices. The payday lender settled the case for $10 million including a $5 million civil penalty and up to $5 million in customer restitution. ACE Cash Express said it had cooperated with the bureau, implementing recommended compliance changes and enhancements and responding to requests for documents and information.

“The bonds have been drifting” since the ruling, the trader said, seeing the paper fall a point or more to a 79 handle on Wednesday.

Sector peer Community Choice Financial Inc. was meantime unchanged, its 10¾% notes due 2019 at 81½.

Consumer-driven sectors mixed

Among consumer-driven names, J.C. Penney Co. Inc. was mixed on the day, according to a trader.

He saw the 5.65% notes due 2020 rising half a point to 88, though the 7.4% notes due 2037 slipped a quarter-point to 88¼.

The trader also saw the Gymboree Corp.’s 9 1/8% notes due 2018 holding steady at 62.

Casino operator Caesars Entertainment Corp. was also mixed, a trader noted.

The trader saw the 8½% notes due 2020 ending “virtually unchanged” at 87 5/8, while the 10% notes due 2018 gained nearly a point to close at 39¼.

© 2015 Prospect News.
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