Digicel slightly recovers after bad earnings; Retail and oil in focus; Dean Foods drops

By James McCandless

San Antonio, March 4 – The distressed market opened a new week focusing on last week’s newsmakers.

Digicel Group Ltd.’s notes gained slightly after taking a dive last week as a result of a negative earnings report.

Elsewhere in telecom, Intelsat SA’s issues slipped.

In retail, Neiman Marcus Group, Inc.’s paper was lower following a ratings downgrade.

Sector peer L Brands, Inc.’s notes declined while PetSmart Inc.’s issues closed mixed.

Rising oil futures coincided with a rise for Alta Mesa Resources, Inc.’s paper while California Resources Corp.’s and Ensco plc’s notes went negative.

Dean Foods Co.’s issues continued a precipitous drop.

Digicel up, Intelsat falls

In telecom, Digicel’s notes saw a slight gain, traders said.

The 6% notes due 2021 picked up 1 point to close at 81¼ bid. The 6¾% notes due 2023 rose 1¾ points to close at 71¼ bid.

The Kingston, Jamaica-based mobile phone network provider’s notes continue to be heavily traded after last Thursday’s announcement that its lenders have eased the leverage covenant to avoid a breach.

That same day, the company reported a lackluster $554 million in revenues.

“I think they’ll restructure before the year is out,” a trader said.

Elsewhere in the telecom space, Intelsat’s issues fell.

Intelsat Jackson Holdings SA’s 5½% notes due 2023 fell ¾ point to close at 90¾ bid. Intelsat (Luxembourg) SA’s 8 1/8% notes due 2023 lost ¾ point to close at 82¾ bid.

Retail mixed

Meanwhile, Neiman Marcus’ paper was moving slightly lower, market sources said.

The 8% paper due 2021 shaved off ¼ point to close at 54 bid.

On Monday, S&P Global Ratings lowered the Dallas-based luxury retailer’s issuer credit rating.

The agency cited the company’s recent agreement with creditors on a comprehensive restructuring plan.

It also anticipates a distressed exchange in the near future.

As part of the agreement, maturities for its credit facilities and unsecured notes will be extended by three years.

Columbus, Ohio-based sector peer L Brands’ notes declined.

The 6¾% notes due 2036 fell 1 point to close at 84½ bid. The 5¼% notes due 2028 were ½ point down to close at 86¾ bid.

Phoenix-based pet supplies retailer PetSmart’s issues were mixed.

The 8 7/8% notes due 2025 lost 1 point to close at 67 bid. The 5 7/8% notes due 2025 held level at 80 bid.

Oil names mixed

Despite an uptick in oil futures, many distressed oil tranches closed negative, traders said.

Houston-based independent oil and gas producer Alta Mesa’s paper moved higher.

The 7 7/8% paper due 2024 added 1¾ points to close at 33½ bid.

Late Monday, S&P lowered the company’s issuer credit rating.

Los Angeles-based independent producer California Resources’ notes closed downward.

The 6% notes due 2024 took off 3¾ points to close at 70½ bid. The 8% notes due 2022 lost 2 points to close at 78 bid.

London-based contract driller Ensco’s issues followed the negative trend.

The 7¾% notes due 2026 dropped ¾ point to close at 83 bid. The 7.2% notes due 2027 fell 3¾ points to close at 81¼ bid.

West Texas Intermediate crude oil futures for April delivery added 79 cents to close at $56.59 per barrel.

North Sea Brent crude futures for May delivery ended the session at $65.67 per barrel after a 60-cent gain.

“We’ve been in the 50’s for a while now, but some people are still skittish about some of these energy names,” a trader said.

Dean Foods drops

Dean Foods’ paper was also falling on Monday, market sources said.

The 6½% paper due 2023 lost 3¾ points to close at 71 bid.

The Dallas-based dairy product manufacturer has been under pressure since reporting its fourth-quarter results last Wednesday.

Pointing to a reduction in sales, the company showed a 50 cents per share loss, missing analyst predictions of a 26 cents per share loss.

It also said that it would be conducting a review to explore strategic alternatives.

© 2015 Prospect News.
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