Rite Aid mixed as company decides on stock split; Intelsat lower on satellite problems

By James McCandless

San Antonio, April 10 – Trading in the Wednesday distressed session saw more activity in retail and energy names.

Rite Aid Corp.’s notes were mixed as the company settles on a 1-for-20 ratio for a reverse stock split after the close.

Sector peer PetSmart, Inc.’s issues trended lower as the market continues to anticipate earnings.

Meanwhile, Intelsat SA’s paper ended negative as a company satellite experienced a communications issue.

Elsewhere in telecom, Frontier Communications Corp.’s notes finished mixed.

Drug maker Teva Pharmaceutical Industries Ltd.’s issues closed similarly mixed as the company enters into a new revolving credit facility.

Oil and gas name Alta Mesa Resources, Inc.’s paper continued to rise a day after the company announced a financial alternatives review.

Despite rising oil futures, distressed oil names saw mixed activity centered around Ensco plc’s, California Resources Corp.’s and Weatherford International plc’s notes.

Rite Aid mixed

Retailer Rite Aid’s notes were mixed to finish the session, traders said.

The 6 1/8% notes due 2023 fell ½ point to close at 80½ bid. The 7.7% notes due 2027 gained 1½ points to close at 58½ bid.

After the close on Wednesday, the Camp Hill, Penn.-based drug store chain’s board of directors agreed to a 1-to-20 ratio for its reverse stock split on its common stock.

Shareholders agreed to the reverse split in March.

The goal of the reverse split was to regain compliance with listing regulations to keep its position on the New York Stock Exchange.

The move will take effect on April 22.

PetSmart lower

Sector peer PetSmart’s issues moved lower, market sources said.

The 8 7/8% notes due 2025 dropped ¾ point to close at 79¾ bid. The 5 7/8% notes due 2025 slid ½ point to close at 87½ bid.

The Phoenix-based pet supplies retailer continues to see heightened scrutiny as earnings are expected from the name this week.

The company has been beset by resistance on multiple fronts from its creditors, namely in legal action over the private equity transfer of e-commerce name Chewy.com.

A large creditor contends that the company was in default at the time of the transfer.

Intelsat off, Frontier mixed

Meanwhile, in the telecom space, Intelsat’s paper saw a downward trend, traders said.

Intelsat Jackson Holdings SA’s 5½% paper due 2023, while being pushed as low as 90 bid, ended the day level at 90½ bid, according to Trace data. Intelsat (Luxembourg) SA’s 8 1/8% paper due 2023 shaved off 1 point to close at 75½ bid.

On Wednesday morning, the Luxembourg-based satellite operator reported a service outage on a satellite serving the Latin America, Caribbean and North Atlantic regions.

The company said that damage to the propulsion system caused a leak of the satellite’s propellant and communications are intermittent.

“It’s not as bad as some of the other issues they’ve had recently,” a trader said. “But everyone’s eyes are on it, so responses to news like this might not be proportional.”

Norwalk, Conn.-based sector peer Frontier’s notes were mixed.

The 11% notes due 2025 lost ¼ point to close at 64 bid. The 10½% notes due 2025 added 1½ points to close at 76¾ bid.

Teva mixed

Drug maker Teva’s issues were similarly mixed, market sources said.

The 4.1% notes due 2046 declined 1 point to close at 73 bid. The 3.15% notes due 2026 edged up ¼ point to close at 83 bid.

The Petach Tikva, Israel-based generic drug maker announced on Wednesday morning that it had entered into a new $2.3 billion unsecured revolving credit facility.

The new facility replaces the existing $3 billion facility.

Chief financial officer Mike McClellan said that the new contingent liquidity came with “extended and flexible terms.”

Alta Mesa rises

In the oil and gas space, Alta Mesa’s paper was on the rise, traders said.

The 7 7/8% paper due 2024 picked up ½ point to close at 34½ bid.

On Tuesday, the 7 7/8% paper rose 2 points.

The Houston-based independent oil and gas producer announced a financial alternatives review with the help of a financial advisor.

A concurrent announcement stated that the company had drawn from the remaining capacity of its $370 million senior secured revolving credit facility.

It said last week that its annual report would be delayed.

Energy tranches mixed

As oil futures rose, popular tranches in distressed energy names finished mixed, market sources said.

London-based contract driller Ensco’s notes were mixed.

The 7¾% notes due 2026 slid 1¼ points to close at 88 bid. The 5.2% notes due 2025 shot up 3 points to close at 81½ bid.

Los Angeles-based producer California Resources’ issues followed a similar pattern.

The 6% notes due 2024 lost 3½ points to close at 69 bid. The 8% notes due 2022 tacked on ½ point to close at 83½ bid.

Baar, Switzerland-based oilfield services name Weatherford’s paper finished mixed.

The 8¼% paper due 2023 dropped 1 point to close at 67 bid. The 9 7/8% paper due 2024, while being pushed lower to 67 bid during the day, held level at 68 bid.

West Texas Intermediate crude oil futures for May delivery picked up 63 cents to close at $64.61 per barrel.

North Sea Brent crude oil futures for June delivery shot up to $71.73 per barrel after a $1.12 gain.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.