iHeart, Intelsat boosted by ‘bottom feeding,’ ‘short covering’; Claire’s Stores retreats

By Stephanie N. Rotondo

Seattle, Dec. 1 – A distressed debt trader said Tuesday’s session was “a slow start to December.”

However, whether by “bottom feeding” or “short covering,” a second trader saw a couple names rebounding.

iHeartMedia Inc., for instance, “rallied a good bit in some of the more beaten down issues,” the trader said.

He pegged the 14% notes due 2021 at 29 and the 10% notes due 2018 at 41.

At another desk, a trader said the 14% notes rose 3 points to 28 5/8, while the 10% notes gained 4 points, closing at 42.

The trader also saw the 9% notes due 2022 moving up 4 points to 73.

Intelsat SA was another name that was recovering a bit, at least in the lower part of the capital structure, a trader said.

“The seniors weren’t any higher,” he noted. “I feel like it’s just short covering or bottom feeding.”

The trader said the 7¾% notes due 2021 improved to 44 from lows in a 38 to 39 context on Monday. The 6¾% notes due 2018 meantime ended at 71, which compared to 65 to 66 previously.

Another trader said the 7% notes due 2021 inched up half a point to 83¼.

But while some recently battered bonds were getting a boost, others were not so lucky.

AK Steel Holdings Corp.’s bonds “keep drifting a bit,” a trader said of the steel producer.

He called the 7 5/8% notes due 2021 “down a couple more points” at 38.

Claire’s falls post-earnings

Claire’s Stores Inc.’s 9% notes due 2019 traded “down a good 5 to 6 points” on Tuesday, following the company’s latest quarterly results.

“Bad earnings,” a trader said.

The trader placed the notes in a 70 to 71 range.

For the third quarter, the Chicago-based jewelry retailer reported net sales of $332.7 million, down 5.1% year over year.

The decline was attributed to several factors, including “unfavorable foreign currency translation,” as well as a decline in same-store sales and store closures.

Same-store sales dropped 0.6%. In North America, sales improved 0.1%, though they fell 1.6% in Europe.

Gross profit percentage meantime tightened to 46% from 47.7%.

Adjusted EBITDA was $39.2 million versus $50.7 million the year before. Net loss came to $35.9 million.

As of Oct. 31, cash and equivalents was $23.9 million.

Breitburn cuts distribution

Breitburn Energy Partners LP’s 8¼% series A cumulative redeemable perpetual preferred units (Nasdaq: BBEPP) declined Tuesday after the Los Angeles-based oil and gas company said it was suspending distributions on its common units.

However, the monthly distribution on the series A and B preferred units were declared, though the series B distribution is being paid in kind.

The series A units fell 29 cents, or 3.17%, to $8.86.

Additionally, a distressed debt trader said the 7 7/8% notes due 2022 closed at 29½, down from 34¾ “a week or two ago.”

In its announcement – which came late Monday – Breitburn said the decision to suspend the common units distribution was due to “the ongoing weakness in commodity prices, and crude oil prices in particular.”

By cutting the distribution, the company hopes to save $111 million annually. Those savings will be redirected to reduce debt or for investments in the company.

© 2015 Prospect News.
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