A slow start to the week in distressed debt; Denbury active on rating news

By James McCandless

San Antonio, Jan. 29 – The trend at the end of last week continued Monday as traders once again described the day’s trading activity as sideways. Many of the most-traded names were still riding on news from the week before, mostly following the rest of the market in trending downward.

Notes of Intelsat SA and Frontier Communications Corp. continued to be some of the most heavily traded names, according to a trader.

Denbury Resources, Inc. was more active than most, a trader said, after receiving a positive rating and stable outlook form Moody’s Investor Service.

Recent gains made by Community Health Systems, Inc. were lost, in part, on the day. The Franklin, Tenn.-based hospital owner and operator’s issues traded heavily upward last week after BlackRock Inc. increased its ownership position in the name.

Other names seeing higher than average activity on the day were Toys “R” Us, Inc., Hexion Inc. and Sears Holdings Corp.

Telecom issues remain on top

Frontier Communications notes were actively traded but mixed as the dust settled from last week’s news that the Norwalk, Conn.-based wireline telecom company had successfully amended its credit agreements to allow it more flexibility in future debt service, according to a market source.

The 7 5/8% bonds due 2024 rose more than a point to close at about 68 1/3 bid.

The 10½ notes due 2022 lost their Friday gains to close at almost 83¼ bid.

The 11% notes due 2025 managed to sustain most of their previous gains, falling slightly to end at 79 bid.

Heavily traded Luxembourg-based satellite communications operator Intelsat also remained at high volume. The Intelsat Jackson SA 7¼% issues due 2020 gained almost ½ point to close at 87½ bid. Intelsat (Luxembourg) SA’s 8 1/8% notes due 2023 traded up to close at nearly 42¾ bid as the 7¾ notes due 2021 closed upwards at 45¾ bid.

Denbury receives positive outlook

Plano, Texas-based oil recovery company Denbury Resources’ bonds had an active day in trading after Moody’s Investor Service assigned a Caa1 rating to its senior second-lien 2022 notes (see story elsewhere in this issue). The 5½% notes due 2022 traded up slightly to close at 79 bid. The 6 3/8% bonds due 2021 lost almost 3 points to close at 83½ bid.

Community Health loses some of last week’s gains

Notes that sustained sharp increases last week on Community Health Systems’ positive investment news trended back downward on Monday, a trader said. The 7 1/8% notes due 2020 dropped off to close at 86 bid and its 6 7/8% notes due 2022 closed just below 71 bid.

Other distressed names add to volume

With the recent news that the bankrupt Wayne, N.J.-based toy retailer Toys “R” Us will be shuttering up to 182 stores, notes in the company continued their fall Monday. The 7 3/8% issues due 2018 fell to close at 25½ bid. The 8¾% notes due 2021 fell to just below 25 bid.

Elsewhere in the retail space, Hoffman Estates, Ill.-based retailer Sears Holdings continued its downturn, according to a trader. The 6 5/8% bonds due 2018 fell more than 2 points to close at about 81 3/8 bid. The 8% notes due 2019 fell to close below 48 bid.

Another name being heavily traded was Columbus, Ohio-based chemical company Hexion, despite no news about the company, according to a trader. Its 6 5/8% notes due 2020 fell ¼ to close at 91¼ bid. The 9% notes due 2020 also shaved off some of last week’s gain to close at just over 77 bid.

“All in all, not too much that was notable,” the trader said.

© 2015 Prospect News.
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