Chesapeake active, weak post-exchange offer news; J. Crew rebounds despite dismal earnings

By Stephanie N. Rotondo

Seattle, Dec. 4 – Chesapeake Energy Corp. remained actively traded Friday, just two days after the company announced a private exchange offer for 10 series of notes.

“They traded very actively,” a trader said. “It’s all Chesapeake, wow.”

The 7¼% notes due 2018 fell 3 points to 59¾, while the 6½% notes due 2017 declined 4 points to 69, the trader said. The 3.57% notes due 2019 lost 4½ points, closing at 38½.

As for the 5¾% notes due 2023, those were pegged at 35, off over 4 points.

“They were down,” a second trader said, seeing the 6½% notes fall as low as 67½.

However, he said that issue went out closer to 69.

The trader also saw the 7¼% notes at 59, which he called off 4 points.

On Wednesday, the Oklahoma City-based oil and gas producer said it would issue up to $1.5 billion of 8% senior secured second-lien notes due 2022 for 10 series of notes maturing 2017 through 2023.

The nearer-term maturities will take priority and will also receive more new notes for each $1,000 of notes tendered.

The early deadline is 5 p.m. ET on Dec. 15. The offer expires at 11:59 p.m. ET on Dec. 30.

J. Crew rebounds

J. Crew Group Inc.’s 7¾% senior PIK toggle notes due 2019 – an issue linked to parent company Chinos Intermediate Holdings A Inc. – had “a bit of a rebound,” a trader said Friday.

However, the trader noted that the paper “wasn’t all that active.”

He pegged the issue at “close to 28,” which compared to levels in the mid-20s on Thursday.

Late Thursday, the retailer reported a wider loss for the third quarter. The company also said it had appointed a new chief operating and financial officer.

For the quarter, net loss was $757.9 million, versus a loss of $607.8 million the year before.

Same-store sales dropped 11%.

In the wake of the disappointing earnings, the company said Michael Nicholson was taking over as COO and CFO.

Joan Durkin is acting as interim CFO. Nicholson will take up the post Jan. 11.

Elsewhere in the world of retail, a trader said the Gymboree Corp.’s 9 1/8% notes due 2018 ended the day at 22½.

He deemed the debt down 9 points since early November.

“They haven’t traded in awhile,” another trader said. “The last round-lot trade was a month ago at 31.”

On Friday, the issue was trading in a 22 to 22½ context, the trader said.

The children’s clothing retailer is scheduled to release earnings on Thursday.

Fortescue softens

A trader said Fortescue Metals Group Ltd.’s bonds “continue to slip” as iron ore prices remain depressed.

“Ever since they did that tender, they’ve gone way down,” the trader added.

On Nov. 10, Fortescue said it wholly owned subsidiary, FMG Resources (August 2006) Pty. Ltd., had launched a tender for its 8¼% notes due 2019 and 6 7/8% notes due 2022.

The tender was done via a modified Dutch auction and was heavily oversubscribed.

As such, the company closed the tender upon the early deadline, which was Nov. 24.

Holders of the 8¼% notes received $900 per each $1,000 of notes tendered, while holders of the 6 7/8% notes got $770.

A total of $311.35 million, or just over 35%, of the 8¼% notes were accepted in the tender. Another $438.64 million, or 47.84%, of the 6 7/8% notes were taken in.

In Friday trading, the trader saw the 8¼% notes in an 81 to 82 context, “down another point or so.” He also saw the 9¾% notes due 2022 at 92, off a like amount.

Another market source placed the 6 7/8% notes at 68½ bid, down 1½ points.

© 2015 Prospect News.
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