PetSmart gains amid document dispute; Altice issues rise as asset sale talk continues

By James McCandless

San Antonio, March 29 – Retailers and telecom names took up much of the attention in distressed trading at the end of the week.

PetSmart Inc.’s notes gained as the company works to keep a majority of documents from being turned over in its legal battle with creditors.

Sector peer Bed Bath & Beyond, Inc.’s issues closed mixed after a week of positivity.

In telecom, Altice SA’s paper was positive as the company works to identify assets for sale.

Intelsat SA and Frontier Communications Corp.’s notes were similarly better in the sector.

As oil futures close the week on a positive note, California Resources Corp.’s issues rose, Weatherford International plc’s paper was mixed and Halcon Resources Corp.’s notes declined.

Utilities name PG&E Corp.’s issues ended the session mixed.

PetSmart gains

In the retail space, PetSmart’s notes were seen gaining on Friday, traders said.

The 8 7/8% notes due 2025 added 2¼ points to close at 74¾ bid. The 5 7/8% notes due 2025 rose ¾ point to close at 83¾ bid.

News released on Friday morning detailed the Phoenix-based pet supplies-retailer’s ongoing legal fight against its creditors and what documents the company would have to turn over in those proceedings.

As creditors push for volumes of documents related to the company’s transfer of e-commerce segment Chewy.com into private-equity hands, a judge ordered it to release 10 volumes of documents related to the transfer.

Recently, the company proposed a loan amendment in an effort to placate its lenders, offering to limit the amount of new debt it could take on if litigation against it is dropped.

Bed Bath & Beyond mixed

Elsewhere in the sector, Bed Bath & Beyond’s issues closed mixed, market sources said.

The 5.165% notes due 2044, while moving as high at 77¾ bid during the day, closed level at 75¼ bid. The 4.915% notes due 2034 picked up 4½ points to close at 82½ bid.

The Union, N.J.-based retail chain’s notes have held an upward trend this week amid an activist investor push for senior management changes.

A group comprising a 5% stake in the company is calling for the resignation of its chief executive officer and board of directors.

“A lot of retail feels stagnant, so for some people to suggest change in this way is seen as a positive thing,” a trader said.

Altice up

Meanwhile, in the telecom space, Altice’s paper saw a positive session, traders said.

The 7 5/8% paper due 2025 added 1 point to close at 87¾ bid.

The Amsterdam-based telecom name announced on Thursday that it expects to conclude a sale of Portuguese assets by the end of the second quarter.

The company said that it has received more than a dozen offers in the sale.

As it tries to combat its debt load, it has also signaled that it will continue to look for targets for more asset sales.

Intelsat, Frontier gains

Luxembourg-based sector peer Intelsat’s notes saw a similar rise, market sources said.

Intelsat Jackson Holdings SA’s 5½% notes due 2023 shot up 1 point to close at 89 bid. Intelsat (Luxembourg) SA’s 8 1/8% notes due 2023 rose ¾ point to close at 69¾ bid.

The company’s structure saw a slight recovery this week after the previous week’s slide stemming from uncertainty surrounding the use and potential profits from the C-band network.

Norwalk, Conn.-based Frontier’s issues joined the sector’s upward push.

The 10½% notes due 2022 improved by 1 point to close at 76½ bid. The 11% notes due 2025 rose ½ point to close at 66 bid.

Oil names mixed

Despite a rise in oil futures, distressed oil names did not move uniformly with them, traders said.

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

The 6% paper due 2024 rose ¾ point to close at 68 bid. The 8% paper due 2022 gained 1¼ points to close at 79¾ bid.

Baar, Switzerland-based oilfield-services producer Weatherford’s notes were mixed.

The 8¼% notes due 2023 held level at 71 bid. The 9 7/8% notes due 2024 shaved off ¼ point to close at 72 bid.

Houston-based producer Halcon’s issues were negative.

The 6¾% notes due 2025 fell ¼ point to close at 60¼ bid.

West Texas Intermediate crude-oil futures for May delivery rose 84 cents, settling at $60.14 per barrel by the session’s end.

North Sea Brent crude-oil futures for May delivery closed at $68.39 per barrel after a 57-cents gain.

PG&E mixed

PG&E’s paper was mixed to end the week, traders said.

The 4% paper due 2046 shot up 3 points to close at 80½ bid. The 3.95% paper due 2047 finished level at 80¾ bid.

On Thursday, a creditor group for the San Francisco-based bankrupt electric utility proposed a $35 billion bankruptcy exit plan that would conclude by the end of the year.

A large portion of the plan would see the setup of a $14 billion cash trust that would payout claims made by victims of 2017 and 2018 wildfires.

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