Diebold notes continue tumble after weak earnings; California Resources improves

By James McCandless

San Antonio, Aug. 6 – Trading in the distressed debt market started with volume centered on names with recent earnings reports out.

Diebold Nixdorf, Inc. notes saw another multi-point drop on Monday as the debt continued to react to the company’s report of disappointing earnings last week.

California Resources Corp.’s issues improved. Last week the company released an earnings report that exceeded analyst expectations.

Intelsat SA paper was mixed again. Last Thursday a subsidiary priced a $1.25 billion offering of senior notes.

Frontier Communications Corp. notes were also mixed. Last week the company released disappointing earnings and received a ratings downgrade.

Bristow Group Inc.’s issues fell for a second day. Last Thursday the company released a less than stellar earnings report.

Mallinckrodt plc paper declined in the medical space.

Diebold craters

North Canton, Ohio-based connected commerce solutions company Diebold notes saw another multi-point decline, traders said, as the market continued to react to the company’s disappointing earnings release last week.

On Thursday, the company posted a 29 cents per share loss in its Q2 earnings report, surpassing analyst expectations of a 1 cent per share profit.

“I thought the rout was over,” a trader said. “It was poised to start recovering from its previous drop but now it’ll probably hang around the 70’s for a while.”

In trading Monday the 8½% notes due 2024 lost about 11¼ points to close at around 69¾ bid.

On Friday, the 8½% notes gained about ½ point.

California Resources rises

Issues from Los Angeles-based independent oil and gas producer California Resources improved to begin the week, market sources said. The company surpassed analyst predictions of a 43 cents per shares loss last Thursday by reporting a 29 cents per share loss in its Q2 earnings report.

“Those bellwethers really saw most of the activity,” a trader said.

The 8% notes due 2022 picked up 1 point to close at 91 bid.

On Friday, the 8% notes were level.

Intelsat mixed

Luxembourg-based satellite communications company Intelsat’s paper was mixed, traders said.

Last Thursday, subsidiary Intelsat Connect Finance SA brought a $1.25 billion offering of senior notes due 2023 to market.

Last Tuesday, the company issued its Q2 earnings report, showing a 38 cents per share loss, beating analyst estimates of a 37 cents per share loss. It also reported $537.71 million in revenues.

The Intelsat (Luxembourg) SA 7¾% paper due 2021 rose about ¼ point to close at 97 bid. The 8 1/8% paper due 2023 fell ½ point to close at 87½ bid.

On Friday, the 7¾% paper gained about ¼ point and the 8 1/8% paper lost about ½ point.

Volume names trade

Elsewhere in distressed telecom, Norwalk, Conn.-based wireline communications name Frontier Communications’ notes were mixed again.

On Friday, Standard & Poor’s lowered its issuer credit rating, senior unsecured debt rating and affirmed a negative outlook.

On Tuesday, the company released its Q2 earnings report, falling short of analyst estimates of a 72 cents per share loss with an 80 cents per share loss. It reported an $18 million net loss.

In trading Monday the 7 5/8% notes due 2024 shaved off 1 point to close at around 67¾ bid. The 10½% notes due 2022 rose about 1¼ points to close at 91¼ bid. The 11% notes due 2025 were level at 81¼ bid.

On Friday, the 7 5/8% notes rose about ¼ point, the 10½% notes lost about ¼ point and the 11% notes lost about 1 point.

Houston-based offshore transportation name Bristow Group’s issues fell again. Last Thursday, the company showed an 82 cents per share loss versus analyst estimates of a 72 cents per share loss. It also beat revenue estimates at $367.89 million.

The 6¼% issues due 2022 fell about 1½ points to close at around 73½ bid.

On Friday, the 6¼% issues traded down about 1¾ points.

Drug maker Mallinckrodt saw its 4¾% paper due 2023 fall about 2½ points to close at 85¾ bid.

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