J.C. Penney notes decline on CEO departure; PetSmart issues mixed a day after CEO appointment

By James McCandless

San Antonio, May 22 – The distressed debt market saw another slow day, traders reported, in anticipation of the three-day weekend.

J.C. Penney Co., Inc. notes fell after the company announced the departure of its CEO on the heels of a recent disappointing Q1 report.

PetSmart Inc. issues were mixed a day after the company appointed retail executive J.K. Symancyk as its new CEO.

Ensco plc bonds jumped up after the company declared its regular quarterly dividend for common stock.

Intelsat SA paper was mixed. The company recently released a lacking Q1 report. Also in telecom, Frontier Communications Corp. notes were mixed. Elsewhere in the energy space, Jones Energy, Inc. issues were mixed.

J.C. Penney falls

Plano, Texas-based department store chain J.C. Penney’s notes fell, traders confirmed, after the company announced that chief executive officer Marvin Ellison would be departing the company to take the top position at Lowe’s Cos., Inc.

Last Thursday, J.C. Penney posted its Q1 report, most notably showing a 4.1% decrease in revenue year-over-year and a 22 cent loss per share. The company blamed some of its troubles on inclement weather.

“This adds to their troubles,” a trader said. “They’re getting boxed out by Macy’s and this doesn’t exactly settle people’s worries.”

The 7.4% bonds due 2037 lost about 2¾ points to close at around 62 bid. The 8 5/8% notes due 2025 fell 2¾ points to close at 87½ bid.

On Monday, the 7.4% bonds gained about 1 point and the 8 5/8% notes shaved off ¼ point.

PetSmart mixed

Phoenix-based pet supplies retailer PetSmart’s issues were mixed, market sources confirmed, after the company announced on Monday that it had appointed J.K. Symancyk, president and CEO of Academy Sports + Outdoors as its new chief executive officer.

Issues have been declining after Amazon.com, Inc. announced that it would offer its Prime subscribers an in-house brand of dog food.

“They can’t seem to get much right lately,” a trader said. “There’s a lot riding on this new guy.”

The 5 7/8% notes due 2025 gained 1 point to close at 67¾ bid. The 8 7/8% notes due 2025 lost ¾ point to close at 49½ bid.

On Monday the 5 7/8% notes lost 1 point and the 8 7/8% notes traded down 1¼ points.

Ensco up

Britain-based oil and gas driller Ensco bonds gained, traders confirmed, after the company declared its regular quarterly dividend of 1 cent per share of common stock.

The dividend will be payable on June 15.

The 5¾% bonds due 2044 gained 2 ½ points to close at 73¾ bid.

Volume names trade

Luxembourg-based satellite communications company Intelsat paper was mixed. A recent Q1 report showed a 56 cents per share loss, missing of analyst estimates of 41 cents per share.

The Intelsat (Luxembourg) SA 7 ¾% paper due 2021 shaved off about ¼ point to close at around 80 bid. The 8 1/8% paper due 2023 rose about 3¼ points to close at around 76½ bid.

Norwalk, Conn.-based wireline name Frontier Communications, another popular name in distressed telecom, saw notes mixed. Last week, the company passed analyst estimates by reporting a Q1 loss of 58 cents per share and $2.20 billion in revenue.

The 7 5/8% notes due 2024 were level at 68½ bid. The 10½% notes due 2022 rose about ½ point to close at 91½ bid. The 11% notes due 2025 were level at 81 bid.

Austin, Texas-based independent oil and gas name Jones Energy issues were mixed. Recently, the company skipped a dividend payment on its 8% convertible preferred stock.

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