Hexion notes remain active on rumors of split-up; California Resources issues trade on venture news

By James McCandless

San Antonio, Feb. 12 – The distressed debt market opened the week positively, but in low volume Monday, as traders described the landscape as jittery after last week’s volatile equity markets.

Hexion, Inc. notes saw more high volume trading after rumors surfaced claiming that sponsor Apollo Global Management is considering selling off portions of the company.

Though it was a quieter day for oil futures, California Resources Corp. issues continued last week’s activity levels after news that it would enter into a $750 million midstream joint venture with investment firm Ares Management.

Revlon, Inc. paper was in high demand in the retail space. The company recently announced the departure of its chief executive officer after a run of revenue losses.

Distressed telecom fixtures Frontier Communications Corp. and Intelsat SA saw an usual level of high volume. Community Health Systems, Inc. dominated the healthcare space.

Hexion activity continues

Issues in Columbus, Ohio-based chemical producer Hexion continued to trade in high volume Monday, according to a market source. The activity was a spillover from Friday, when rumor spread that investment firm Apollo Global Management would look to sell off parts of the company in the near future.

“These bonds started moving before these rumors, so someone must have caught wind of it beforehand,” a trader said. “But we still don’t know if there is a buyer out there for them.”

The 9% issues due 2020 rose 1½ point to close above 82½ bid. Despite the high volume, the 6 5/8% issues due 2020 remained at Friday’s price of 92 bid.

Venture news drives CalRes

Notes in Los Angeles-based oil and gas producer California Resources took up much of the energy space, a market source said, continuing to react to last week’s news that it had partnered with Ares Management for a $750 million common and preferred equity deal. The investment firm also purchased $50 million in common stock in a private placement deal for 2.34 million shares.

The 6% notes due 2024 dropped almost 3 points to close at 66 bid. The 8% issues due 2022 gained ¾ point to close at 79¾ bid.

Revlon rises

New York City-based cosmetics producer Revlon’s paper traded higher, a trader confirmed, continuing a trend precipitated by the recent departure of CEO Fabian Garcia. The company is currently seeking ways to reverse losses in revenue after experiencing a loss of more than $165 million in 2017.

The 5¾% paper due 2021 rose over 2 points to close at 80 2/3 bid. The 6¼% paper due 2024 climbed more than 1 point to close above 65 bid.

Active names trade

Norwalk, Conn.-based wireline telecom Frontier Communications notes were on the rise Monday, a trader said, reclaiming some of last week’s losses. Those notes have been on a positive trend recently after making favorable changes to its credit agreements.

The 7 5/8% notes due 2024 trended upward to close just below 61¼ bid. The 10½% notes due 2022 rose 2 points to close at 81¼ bid. The 11% notes due 2025 gained ¾ point to close at 74½ bid.

Luxembourg-based satellite communications company Intelsat’s 5½% issues due 2023 gained about ½ point to close at above 77 bid. The Intelsat Jackson SA 7¼% notes due 2020 gained 1 point to close at 86¼ bid.

Franklin, Tenn.-based hospital operator Community Health Systems paper began the week trading higher. The 7 1/8% paper due 2020 jumped up ½ point to close at 85½ bid. The 6 7/8% paper due 2022 gained almost to points to end at 65¾ bid.

“I get why a lot of people stayed out,” a trader said. “With the volatility that was in the market last week, and all of the things written about whether or not the market’s really rolling over, you start today and you’re not sure if you’re supposed to buy or sell.”

© 2015 Prospect News.
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