Neiman Marcus notes tumble after earnings release; Sears paper extends recent decline

By James McCandless

San Antonio, Sept. 18 – The distressed debt market increased its focus on struggling retail names in Tuesday trading.

Neiman Marcus Group, Inc.’s notes cratered after the company released a second-quarter earnings report with mixed results.

Sears Holdings Corp.’s notes declined, with one tranche adding to losses seen a day earlier.

Windstream Holdings, Inc.’s paper traded mixed. Last week, the company outlined its plan to refinance its revolver and a term loan.

In other trading, Intelsat SA’s notes and California Resources Corp.’s paper improved, while Frontier Communications Corp.’s notes were mixed.

Neiman Marcus down

Neiman Marcus’ notes took a dive on Tuesday, traders said.

The 8% notes due 2021 lost about 8¾ points to close at around 65½ bid.

The privately held company released its second-quarter earnings results, reportedly showing improved sales but an ever-present debt problem.

“They had around 800 single trades today,” a trader said. “That’s the most in a single day I’ve seen in a while. People were just piling on. I think with that amount of activity it’ll be tough to reduce the amount of scrutiny on it anytime soon.”

Neiman Marcus is a Dallas-based luxury department store chain.

Sears off

Elsewhere in retail, Sears issues weakened, market sources said.

The 6 5/8% notes due 2018 lost about 3½ points to close at 91½ bid. The 8% notes due 2019 fell 1¼ points to close at 36½ bid.

On Monday, the 6 5/8% notes rose 3 points and the 8% notes lost 1¾ points.

The company released its second-quarter report last Thursday, showing widening losses.

The company reported a loss of $4.68 per share, increasing from a loss of $2.33 per share in the second quarter of 2017.

Sears is a Hoffman Estates, Ill.-based department store chain.

Windstream mixed

In other trading, Windstream’s paper ended mixed, traders said.

The 7¾% paper due 2021 shaved off ¾ point to close at 61¾ bid. The 7½% paper due 2022 added ½ point to close at 58½ bid. The 6 3/8% paper due 2023 gained 3 points to close at 50¼ bid.

On Monday, the 7¾% paper was level, the 7½% paper jumped up 11½ points and the 6 3/8% paper rose about 2¼ points.

At a conference last week, president and chief executive officer Tony Thomas outlined the company’s focus on refinancing its $975 million revolving credit facility, pointing out that doing so is contingent on winning a federal court case against a hedge fund that claims that Windstream is in default.

Windstream is a Little Rock, Ark.-based network communications company.

Volume names trade

Intelsat’s notes gained in distressed telecom trading.

The Intelsat Jackson SA 5½% notes due 2023 rose about ¼ point to close at 91 bid. The Intelsat (Luxembourg) SA 8 1/8% notes due 2023 rose 1¼ points to close at 86¼ bid.

Elsewhere in distressed telecom, Frontier Communications’ issues were mixed.

The 7 5/8% notes due 2024 dropped about ¾ point to close at 65¼ bid. The 10½% notes due 2022 rose ¼ point to close at 90¼ bid. The 11% notes due 2025 gained ½ point to close at 80¼ bid.

Los Angeles-based independent oil and gas producer California Resources’ paper improved, following oil futures.

The 6% paper due 2024 rose about ½ point to close at 82 bid. The 8% paper due 2022 added 1¾ points to close at 92 bid.

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