Murray Energy gains for second session; Intelsat, iHeart up; MDC Partners rises on Goldman investment

By Colin Hanner

Chicago, Feb. 15 – Several issues were lifted in the distressed market on Wednesday, traders said, in line with an equity market that continues to set new records, and a private coal company mirrored substantial gains from the previous session.

“Murray [Energy Corp.] is really trading bajillions every day,” a trader said, referring to the one distressed issue that saw another multi-point gain on the session.

The St. Clairsville, Ohio-based coal company jumped on Tuesday after Foresight Energy – a company Murray Energy has a 50% limited partner interest in – announced preliminary quarterly earnings.

In other parts of the market, “a lot of stuff continues to rally,” another trader said, pointing to telecommunications satellite company Intelsat SA, which nearly rose across the board in several bonds.

Following the trend, iHeartCommunications, Inc. was up but traded tight, a trader said.

Perhaps the biggest gainer of the day was New York-based advertising and marketing holding company, MDC Partners Inc., which climbed into regular high-yield levels after it was announced that Goldman Sachs Group Inc. will invest $95 million into the company.

The bonds, as well as MDC’s stock, soared on the day, a trader said.

On the same day the Commerce Department said retail sales rose in January and President Trump met with several retail chief executive officers, Neiman Marcus Group, Inc. traded down, but was not very active, a market source said.

Several exploration and production companies saw mixed movement on the session, Community Health Systems, Inc. was up marginally, and chemical company Hexion Inc. took a breather from its persistent gains, trading down slightly.

Murray gains

Since a slight downturn on Monday’s session, coal producer Murray Energy’s distressed notes have climbed considerably.

“Murray bonds were up a few more points” on the session, a trader said, referring to the 11¼% notes due 2021, which were up 3 points to 82.

Another trader said the notes were up 3½ points to 82½.

On Tuesday, the notes traded up 4 points off preliminary quarterly results of Foresight Energy, a thermal coal producer that Murray has a stake in.

Intel ‘continues to rally’

Several issues of Luxembourg-based Intelsat Jackson Holdings SA and Intelsat Luxembourg Holdings SA were mixed on the session, possibly due in part to expected earnings coming from the satellite company in the next couple of weeks.

The Jackson-linked 7½% notes due 2021 were up 3/8 point to 81½, a trader said. Another trader said the notes were up ½ point to the same handle.

From there, the 7¼% notes due 2019 were unchanged at 89, while the 5½% notes due 2023 were down ½ point to 72¾.

For the Luxembourg-linked notes, the 7¾% notes due 2021 were up 1 point to 40, a trader said, and the 8 1/8% notes due 2023 were up 2 points to 39.

iHeart ‘better’

For the third-consecutive session, two sets of iHeartCommunications issues strengthened, especially the 14% notes due 2021, which were up 1 point to 40½.

Another trader said the notes were up ½ point to 40.

The 9% notes due 2021 were up 5/8 point to 77, a market source said.

On Wednesday, Fitch Ratings still expressed doubt of the company defaulting.

“iHeart could pursue an additional [distressed debt exchange],” said Patrice Cucinello, director of U.S. Corporates. “Their capital structure is untenable so a broader restructuring could be in the cards.”

Fitch also predicted that the U.S. high-yield default rate will drop to 4.2% by the end of the month from 4.7% at the end of January.

MDC booms

A trader credited the 10-point gain in MDC Partners’ 6½% notes due 2024 to a $95 million investment from Goldman Sachs Group, Inc. into the advertising and communications company. A report from Reuters said the investment proceeds will pay down MDC’s existing debt.

The notes finished with a 96 handle, up from the mid-80s, a trader said.

Meanwhile, MDC’s stock was up $1.90, or 28.15%, to $8.65.

Neiman falters

Though activity was low for Neiman Marcus on Wednesday, the company’s 8% notes due 2021 were down ½ to ¾ point to a 56½ to 57 zip code, a trader said.

On Tuesday, both sets of distressed bonds jumped 1½ points.

During Wednesday’s session, indicators from the Commerce Department showed that, withholding automobiles and gasoline, retail sales were up 0.7%, which includes clothing.

President Trump also met with a handful of retail CEOs – including J.C. Penney Co., Inc. – about changes to the tax code, as well as a tax on imported goods, which could impact retailers across the board.

A mix in E&P

Seeing a “bunch of trades” was geoscience company CGG SA, which saw a ¾-point gain in its 6½% notes due 2021 to finish at 48.

Driller Pacific Drilling Co.’s 5 3/8% notes due 2020 were down “almost 2 points” to 46½, a trader said.

And oil and natural gas producer California Resources Corp.’s 8% notes due 2022 were unchanged at 87¾.

Distressed wrap-up

A pair of Franklin, Tenn.-based Community Health Systems’ notes traded tight on Wednesday, a trader said.

The 6 7/8% notes due 2022 were up ¾ point to 75, while the 8% notes due 2019 were up ¼ point to 89¾.

After posting gains the past few sessions, Columbus, Ohio-based Hexion traded down 1/8 point in its 9% notes due 2020.

Telecommunications company Avaya, Inc.’s 7% notes due 2019 were unchanged at 80¾.

And global shipper Navios Maritime Holdings, Inc.’s 7 3/8% notes due 2022 were up 1 3/8 points to 73¾.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.