Oil companies rule market as crude advances; Accudyne higher; iHeart eyed on tender news

By Colin Hanner

Chicago, April 6 – With oil prices rising again on Thursday, the exploration and production sector was active in the distressed market, a trader said, though some idiosyncratic names saw some wide movement on the session.

“All the oil and natural gas were active again,” a trader said, the third consecutive day where oil prices – and related companies – generally moved higher with the market.

California Resources Corp. was up marginally on the session, a trader said, followed by Denbury Resources Inc. and offshore transportation service company GulfMark Offshore Inc., which was up steadily.

Dallas-based pumps and compressor producer Accudyne Industries LLC – a company that works primarily with the energy business and is not typically seen trading in the distressed market with high volumes, traders said – was one of the more active names of the session.

Pharmaceutical companies Valeant Pharmaceuticals International, Inc. and Concordia International Corp. were mixed on the session.

With another retailer likely to succumb to bankruptcy – teen clothing company Rue21 Inc. – retailers did not appear to respond on Thursday.

Claire’s Stores Inc. paper was down a fraction of a point of the session.

And San Antonio-based broadcasting and outdoor advertising giant iHeartCommunications Inc. was “sideways” after it was announced that the tender offer for several of its notes and term loans would be extended another week, though at least one issue traded up marginally.

E&P alive

Crude oil prices continued to move higher for the third session in four on Thursday, and E&P and related companies were mostly eager to follow.

Los Angeles-based California Resources’ 8% notes due 2022 were down 1/8 point to 82¼, a trader said.

Plano, Texas-based natural gas and oil exploration and production company Denbury Resources’ 6 3/8% notes due 2021 were up ¼ point to 83¾.

Offshore transportation company GulfMark Offshore’s 6 3/8% notes due 2022 were up 2 3/8 points to 52¼.

On the other hand, offshore driller Noble Holdings International Ltd.’s 5½% notes due 2042 were down 1½ points to 68¼.

Accudyne up

The non-regularly traded Accudyne Industries was up 4 points in its 7¾% notes due 2020, a trader said, finishing at 85½.

Another trader said they had been trading at 82 earlier in the day, then rallied to an 84 to 86 context to finish.

“I have no idea what’s going on with those,” the trader said. “I haven’t seen any news, but they’re definitely pretty active.”

Pharma mixed

Woes were mixed for Concordia International on the session, with two sets of notes dropping and one seeing a several point upswing.

The 9½% notes due 2022 were “below 19,” a trader said, while the 7% notes due 2023 were “below 17,” both of which were “leaking” on the day.

“It’s a slow bleed to zero,” a trader said of the notes. “They haven’t traded in the past few days but were more defined today.”

Another trader said the 9% notes due 2022 were up 1¼ points to 69¼.

And fellow Candian pharmaceutical company Valeant Pharmaceuticals’ 7½% notes due 2021 were down 1 point to 84¾.

Retail calm amid bankruptcies

Claire’s Stores was one of the only distressed names to trade actively on the session, the same day a story from Bloomberg reported that Rue21 will likely file for bankruptcy before the end of the month.

Claire’s 9% notes due 2019 were down ½ point to 39, a trader said.

The Rue21 news wasn’t a shock to the tumbling traditional retail sector that continues to take hits almost daily, a trader said.

“Everybody expected [Rue21 to file],” the trader said. “It wasn’t shocking to anybody to be quite honest, especially based on where it’s trading.”

The trader referenced Payless ShoeSource’s recent bankruptcy filing on Tuesday as just another retailer to file, adding that the likelihood of filing for bankruptcy is usually built into the price of the bonds.

Not much in iHeart

On Thursday, iHeartCommunications extended its private exchange offers for five series of priority guarantee notes and senior notes due 2021 in connection with a proposed debt restructuring, though bonds on the day were “sideways even after the headlines of the exchange offer,” a trader said.

Yet, iHeart’s 9% notes due 2022 were up ½ point to 75½, a market source said.

The exchange offer in question will continue until 5 p.m. ET on April 21, extended from April 14.

As of 5 p.m. ET on April 4, none of the existing notes had been tendered in the exchange, according to a company update.

Fellow broadcasting company Cumulus Media Inc.’s 7¾% notes due 2019 were down 1¼ points to 29.

Distressed roundup

Intelsat Luxembourg Holdings SA’s 7¼% notes due 2021 were down “about 1 point,” closing around 60, a trader said.

Tampa, Fla.-based residential mortgage servicing company Walter Investment Management’s 7 7/8% notes due 2021 were up 4 points to 59¼ on “heavy volume for them,” a trader said.

St. Clairsville, Ohio-based private coal company Murray Energy Corp.’s 11¼% notes due 2021 were unchanged at 76¾.

And Philadelphia-based packaging and paperboard company Paperworks Industries Inc.’s 9½% notes due 2019 were down ¾ point to 78.

Susanna Moon contributed to this review

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