Endo up as sector peer settles lawsuit; Bed Bath & Beyond rises as investors push CEO exit

By James McCandless

San Antonio, March 26 – The Wednesday session in the distressed space was awash with news in the pharmaceutical and retail sectors.

Endo International plc’s notes traded higher as a sector peer agreed to settle a lawsuit concerning opioid manufacturer liabilities.

Elsewhere in the space, Teva Pharmaceutical Industries Ltd.’s issues also gained.

Meanwhile, in retail, Bed Bath & Beyond, Inc.’s paper shot up after activist investors called for the replacement of the company’s chief executive officer and board of directors.

Sector peer PetSmart Inc.’s and Neiman Marcus Group Inc.’s notes dropped as the companies work with creditors to amend their respective agreements.

In oil and gas, Weatherford International plc’s issues ended mixed after announcing the completion of a sale of land drilling rigs.

California Resources Corp.’s and Halcon Resources Corp.’s paper followed the upward trend set by oil futures as Alta Mesa Resources, Inc.’s notes fell.

Endo, Teva higher

Endo’s notes were pushing higher on Tuesday, traders said.

The 6% notes due 2025 picked up 3 points to close at 73 bid. The 6% notes due 2023 added 1¼ points to close at 77¼ bid.

The Dublin-based drug maker’s structure was faring better in the session after sector peer Purdue Pharma LP, producer of opioid drug OxyContin, announced that it had settled a lawsuit with the state of Oklahoma for $270 million.

Endo, which also manufactures opioid drugs, has stopped promoting opioid products in the wake of an epidemic of overdoses linked to opioid medication.

“Any good news anywhere in this space is going to send this higher,” a trader said.

Petach Tikva, Israel-based peer Teva’s issues were also better.

The 4.1% notes due 2046 rose ¾ point to close at 72 bid.

Bed Bath & Beyond up

Meanwhile, in retail, Bed Bath & Beyond’s paper also saw a positive day, market sources said.

The 5.165% bonds due 2044 gained 4 points to close at 75½ bid. The 4.915% bonds due 2034 moved up 2 points to close at 77 bid.

Late Monday, an activist investor group led by Legion Partners Asset Management LLC, Macellum Advisors GP LLC and Ancora Advisors LLC disclosed a combined 5% stake in the Union, N.J.-based retailer.

The group wants the company to consider its options, which include the sale of its noncore brands.

The activist investor group also wants to see the replacement of chief executive officer Steven Temares and named a slate of candidates to replace its existing board of directors.

“That made it pretty topical,” a trader said. “They’ve been stagnant for a while just like everyone else in retail.”

PetSmart, Neiman drops

Sector peer PetSmart’s notes dropped, traders said.

The 5 7/8% notes due 2025 shaved off ¾ point to close at 83¼ bid. The 7 1/8% notes due 2023 lost ¼ point to close at 71¼ bid.

A day after the Phoenix-based pet-supplies retailer proposed potential loan amendments to its senior creditors, the company is facing pushback.

A majority of lenders informed the company that they do not consent to a plan that would involve dropping litigation against the company in exchange for a limit on how much more debt the company could tack on.

“The boat’s being rocked,” a trader said. “If they can’t come up with something people can agree to in the long term, they’re going to tread more water.”

Meanwhile, Dallas-based luxury retailer Neiman Marcus’ issues were also falling.

The 8% notes due 2021 fell ½ point to close at 53½ bid.

On Monday, the company announced that it had reached an agreement with 55% of term loan holders and 60% of unsecured note holders to extend debt maturities by three years.

In April, it will hold an exchange of high-interest notes due 2021 for a 10% equity stake in e-commerce segment MyTheresa.

Weatherford mixed

Elsewhere, in oil and gas, Weatherford’s paper ended the session mixed, market sources said.

The 8¼% paper due 2023 shed ¼ point to close at 70½ bid. The 9 7/8% paper due 2024 rose ¾ point to close at 72¼ bid.

After the Monday close, the Baar, Switzerland-based oilfield services provider announced the completion of a sale of four drilling rigs in Algeria and Iraq.

Two onshore rigs in Algeria and two rigs in Iraq sold for $32 million.

The divestment deal was signed in July 2018.

The company said that it will continue to look for divestiture opportunities as part of its debt-reduction strategy.

Oil futures rise

A boost for oil futures led to mostly positive movement in distressed oil names, traders said.

Los Angeles-based independent oil and gas producer California Resources’ notes followed futures higher.

The 8% notes due 2022 gained 1½ points to close at 80 bid.

Houston-based sector peer Halcon’s issues were also on a positive trend.

The 6¾% notes due 2025 added ½ point to close at 60 bid.

Alta Mesa, another Houston-based producer, saw its paper move down.

The 7 7/8% paper due 2024 lost ¾ point to close at 39 ½ bid.

On Tuesday, West Texas Intermediate crude oil futures for May delivery jumped $1.12 to close at 59.94 per barrel.

North Sea Brent crude oil futures for May delivery ended at $67.97 per barrel after a 76 cents pickup.

© 2015 Prospect News.
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