Murray Energy notes add to recent gains; American Tire issues fall again in wake of upward spike

By James McCandless

San Antonio, July 19 – Trading in the distressed debt market remained fixed on names pegged with recent news on Thursday as the overall market volume remained flat.

Murray Energy Corp. notes improved, adding to recent gains. On Tuesday, its chief executive officer called for less government involvement in energy markets.

American Tire Distributors issues fell again, after ending a five-day run of positive trading on Wednesday amid company efforts to calm investor worries about recent business losses.

Intelsat SA paper was mixed. Last week, the Federal Communications Commission signaled its willingness to change a rule that would favor satellite companies.

Frontier Communications Corp. notes declined. The company’s chief financial officer recently announced his resignation.

Hornbeck Offshore Services, Inc. issues dropped again.

Mallinckrodt plc paper traded down in the pharmaceutical space.

Murray Energy up

St. Clairsville, Ohio-based coal producer Murray Energy’s notes gained for a second day, traders confirmed. In remarks to a conference on Tuesday, CEO Robert Murray said that the government should end subsidies for wind farms, that energy utilities were eschewing coal usage for political reasons and that the government should increase protections for the coal industry.

Murray and other energy companies are waiting for a Department of Energy decision on whether or not it will provide federal assistance to at-risk coal and nuclear power plants. Secretary of Energy Rick Perry has indicated that the department is studying the cost of the measure.

The 11½% paper due 2021 jumped up about 3 points to close at 75 bid.

On Wednesday, the 11½% paper was level.

American Tire continues slide

Huntersville, N.C.-based tire distributor American Tire issues declined for a second day, market sources confirmed, after a five-day upswing that was propelled by executives holding a conference call with investors to assure them that the recent loss of distribution deals with Bridgestone and Goodyear would not hurt future business development.

“Honestly, I’m surprised that the bonds are as high as they are,” a trader said. “I expect it to keep falling and hover in the 20’s for a while.”

The 10¼% notes due 2022 lost about 3 points to close at around 31 bid.

On Wednesday, the 10¼% notes lost about ½ point.

Intelsat mixed

Luxembourg-based satellite communications company Intelsat notes were mixed again, traders confirmed. Last Thursday, the FCC announced that it was considering a rule change that would allow mobile providers to access airwaves currently restricted to traditional broadcasters. The move could open up new sources of revenue for satellite firms.

On Wednesday, Standard & Poor’s issued an upgrade to the company’s corporate credit rating and affirmed a negative outlook based on a recent buy back of its Intelsat (Luxembourg) SA 7¾% senior notes due 2021.

The 7¾% notes due 2021 were level at about 95½ bid. The 8 1/8% notes due 2023 picked up about ¼ point to close at 84¾ bid.

On Wednesday, the 7¾% notes gained about 2 points and the 8 1/8% notes lost about ¾ point.

Volume names trade

Norwalk, Conn.-based wireline name Frontier Communications notes declined. The company recently announced the exit of CFO Perley McBride.

The 7 5/8% notes due 2024 lost about 1 point to close at 68 bid. The 10½% notes due 2022 shaved off about 1¼ points to close at around 89¾ bid. The 11% notes due 2025 fell about ½ point to close at 79 bid.

Covington, La.-based oil and gas marine transportation company Hornbeck Offshore Services declined again. Traders have indicated that a recent merger between two companies in the same industry, Tidewater and GulfMark Offshore, has weakened Hornbeck’s position.

The 5 7/8% notes due 2020 shed 1½ points to close at 77 bid. The 5% notes due 2021 lost about 1 point to close at around 72 bid.

On Wednesday, the 5 7/8% notes lost about 1½ points and the 5% notes fell 1 point.

Britain-based drug maker Mallinckrodt saw its 4¾% paper due 2023 lose about ½ point to close at around 83 bid.

On Wednesday, the 4¾% paper dropped about ¼ point.

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