Petsmart ticks higher as most active issue; Gymboree, GulfMark see headlines but no movement

By Colin Hanner

Chicago, April 11 – Trading in the distressed market was tight and not nearly as active on Tuesday as a day prior, a trader said, with the most activity coming out of Petsmart Inc. and recently-priced new issues and with movement not veering too wide.

“It slowed to trickle today,” the trader said of the session’s activity, which is yielding to current and upcoming religious holidays. “And tomorrow will probably look dry compared to today.”

Phoenix, Ariz.-based pet retailer Petsmart was “probably the most active name in the market today,” a trader said, and one of few issues to see movement over 1 point.

Gymboree Corp. and GulfMark Offshore Services Inc. caught headlines on Tuesday – the former for a possible bankruptcy filing, the other likely following suit – though bond movement was nearly nonexistent in both issues, a trader said.

After seeing a sizeable gain on Monday, Endo International plc pared those gains on Tuesday, a trader said.

Idiosyncratic movers tended to make up the rest of the movement, like telecommunications company Frontier Communications Corp., which is “always active,” a trader said, and Intelsat SA, which saw a subsidiary issue inch higher.

Petsmart ‘very active’

The 7 1/8% notes due 2023 were up 1¼ point to 93¾, a trader said, adding there were 50 high-volume trades on the day.

Another trader said the bonds were as high as 94 before deflating to 93, only to rise to a 93¾ context.

News, but no moves

A series of headlines caught investors’ attention on the session, though respective bonds had little to no action.

San Francisco-based children’s retailer Gymboree was surrounded with a cloud of pre-bankruptcy headlines on Tuesday, with Bloomberg reporting that the retailer may transfer its debt load to lenders.

A looming interest payment is due June 1 for its 9 1/8% notes due 2018, which have been trading around 5 in the secondary market.

“Bonds aren’t trading much,” a trader said of Gymboree. “It won’t shock anyone to be quite honest” if they were to file.

Houston-based marine transportation service company GulfMark Offshore was delisted from the New York Stock Exchange on Monday, and a trader said news surrounding the company points to a possible prepackaged bankruptcy filing by the end of the week.

Endo treks down

After announcing the offering of $750 million of secured notes, as well as preliminary first quarter results that align with market expectations, Endo International’s bonds were higher on Monday.

Profit taking may have been behind the 1-point loss in the 6% notes due 2023, which finished at 86, a trader said.

In energy

Though crude oil futures advanced for the fifth-straight session, California Resources Corp.’s 8% notes due 2022 were down 5/8 point to 82, a trader said, a deepened furthering of the oil price-bond tandem. A market source said the notes were down ½ point to a similar handle.

Houston-based electricity provider GenOn Energy Corp. saw some notable volume trading in the electricity sector, though its 7 7/8% notes due 2018 were unchanged at 73.

Notable one-off moves

Idiosyncratic movement was characteristic of a session where issues tended to trade tight and not very often.

Intelsat Jackson Holdings SA’s 7¼% notes due 2020 were up ¾ point to 93½, a trader said.

Supermarket retailer Fresh Market Inc. was up fractionally to 80½ in its 9¾% notes due 2023.

Commercial finance business Textron Financial Corp.’s 2.774% notes due 2022 were up ¾ point to 77.

Frontier Communications’ 11% notes due 2025 were down ½ point to 97¾.

Columbus, Ohio-based chemical company Hexion Inc.’s 9% notes due 2020 were up 1¼ points to 79.

Plano, Texas-based rent-to-own furnisher Rent-A-Center Inc.’s 4¾% notes due 2021 were up ¼ point to 88½.

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