Frontier improves as company offers secured notes; Neiman falls amid revenue report

By James McCandless

San Antonio, March 12 –The distressed space saw a higher level of activity on Tuesday with a renewed focus on news-driven names.

Frontier Communications Corp.’s notes were improving as the market anticipates a $1.65 billion pricing of secured notes.

Sector peer Intelsat SA’s issues were mixed on Tuesday.

Meanwhile, retailer Neiman Marcus Group, Inc.’s paper fell amid the company’s release of its revenues for the second-quarter.

Elsewhere in retail, L Brands, Inc.’s notes were mixed.

Modest gains for oil futures served as the backdrop for a positive day for California Resources Corp.’s issues while Ensco plc’s and EP Energy Corp.’s paper closed mixed.

Deutsche Bank AG’s notes continued to move upward, spurred on by Monday merger talk.

Bankrupt utility PG&E Corp.’s issues were gaining.

Frontier up, Intelsat mixed

Frontier’s notes were improving throughout the session, traders said.

The 11% notes due 2025 gained 1 point to close at 65¾ bid. The 10½% notes due 2022 rose 1¼ points to close at 74¼ bid.

On Tuesday, the Norwalk, Conn.-based wireline telecom name’s structure was active as the market anticipated a pricing of senior secured notes.

After the close, the company priced a $1.65 billion issue of eight-year first-lien senior secured notes (B2/B/BB) at par to yield 8%, Prospect News reported.

Elsewhere in the sector, Luxembourg-based satellite operator Intelsat’s issues were mixed by the Tuesday close.

Intelsat Jackson Holdings SA’s 5½% notes due 2023, while reaching as high as 91½ bid during the day, ended level at 91 bid, according to Trace data. Intelsat (Luxembourg) SA’s 8 1/8% notes due 2023 added 1½ points to close at 77½ bid.

Neiman falls, L Brands mixed

Meanwhile, Neiman Marcus’ paper was falling in the retail space, market sources said.

The 8% paper due 2021 shaved off ¾ point to close at 55½ bid. The 7 1/8% paper due 2028 dropped 7½ points to close at 70 bid.

On Tuesday afternoon, the Dallas-based luxury retailer released its revenue numbers for the second quarter.

In the period ending on Jan. 26, the company reported total revenues of $1.39 billion, lower than the $1.49 billion reported this time last year.

It is also in the midst of negotiations with its creditors to confirm an agreement that would extend its maturities by three years and would give creditors partial ownership of e-commerce segment MyTheresa.

“They’re in a very fluid situation,” a trader said. “Marble Ridge wants two years instead of three, so nothing’s settled yet.”

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

The 6¾% notes due 2036 slipped ¼ point to close at 84 bid. The 5¼% notes due 2028 added 2½ points to close at 88 bid.

Oil names mixed

Despite modest gains in oil futures, popular distressed oil names were largely mixed, traders said.

Los Angeles-based independent oil and gas producer California Resources’ issues were positive.

The 6% notes due 2024 were better by 1¼ points to close at 69¼ bid. The 8% notes due 2022 added 1¾ points to close at 76½ bid.

London-based contract driller Ensco’s paper saw mixed results.

The 7¾% paper due 2026 tacked on ¾ point to close at 84½ bid. The 7.2% paper due 2027 fell ¾ point to close at 79 bid.

Houston-based producer EP Energy’s notes were also mixed.

The 7¾% notes due 2026, while pushing up to 86 bid, closed level at 85¼ bid, according to Trace data. The 9 3/8% notes due 2024 shed 1½ points to close at 43 bid.

West Texas Intermediate crude oil futures for April delivery saw an 8-cent rise to close Tuesday at $56.87 per barrel.

North Sea Brent crude oil futures for May delivery ended the session at $66.67 per barrel after a 9-cent gain.

Deutsche Bank rises

In finance, Deutsche Bank’s issues were headed higher, market sources said.

The 4 7/8% notes due 2032 rose 1½ points to close at 86¾ bid.

On Monday, the 4 7/8% notes added 1 point.

The Frankfurt-based financial services company’s issues have been rising since Monday’s news that executives had agreed to hold preliminary talks for a potential merger with competitor Commerzbank AG.

PG&E gains

PG&E’s paper rose, snapping a few days of declines, traders said.

The 6.05% paper due 2034 rose ½ point to close at 92½ bid.

The San Francisco-based bankrupt electric utility has weathered a string of negative headlines over safety protocols, court proceedings and a shifting regulatory environment.

© 2015 Prospect News.
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