Teva loses as legal troubles mount; Weatherford drops as bankruptcy expected

By James McCandless

San Antonio, May 13 – The distressed space was pushed lower under the weight of the uncertainty in trade and a slate of negative news for individual names.

Teva Pharmaceutical Industries Ltd.’s notes were losing after news broke that 44 states have filed a lawsuit against the name for alleged price fixing.

Sector peers Endo International plc’s and Mallinckrodt plc’s issues were also dragged down.

Elsewhere, in oil and gas, Weatherford International plc’s paper dropped as the company announced its intention to file for bankruptcy.

Bristow Group, Inc.’s notes crashed after the company filed for bankruptcy over the weekend.

As oil futures fell, California Resources Corp.’s issues traded mixed and Halcon Resources Corp.’s paper improved.

In retail, Bed Bath & Beyond, Inc.’s notes were mixed after its chief executive officer resigned due to investor pressure.

PetSmart, Inc.’s issues went negative.

Teva loses

Teva’s notes were losing during the Monday session, traders said.

The 4.1% notes due 2046 lost 2¼ points to close at 69¾ bid. The 3.15% notes due 2026 shed 2 points to close at 81 bid.

Over the weekend, news broke that 44 states have filed an antitrust lawsuit against the Petach Tikva, Israel-based generic pharmaceuticals producer and other drug makers over an alleged price fixing scheme.

The 20 companies named in the suit are accused of inflating drug prices and restricting competition in the generic drug market.

The company denies any wrongdoing.

“This is the kind of thing that wards off a lot of people but keeps the sector popular with distressed guys,” a trader said.

Elsewhere in the sector, Dublin-based drug maker Endo’s issues were also moving downward.

The 6% notes due 2023 dropped 2¼ points to close at 77¾ bid. The 6% notes due 2025 declined 2¾ points to close at 71½ bid.

Staines-upon-Thames, U.K.-based Mallinckrodt, another sector peer, saw its paper move similarly negative.

The 4¾% paper due 2023 fell 2¼ points to close at 74¼ bid.

Weatherford drops

Meanwhile, in oil and gas, Weatherford’s notes dropped, market sources said.

The 8¼% notes due 2023 shaved off ½ point to close at 61½ bid. The 9 7/8% notes due 2024 lost 2½ points to close at 60½ bid.

Late Friday, the Baar, Switzerland-based oilfield services provider announced that it would be filing for Chapter 11 bankruptcy in what it expects to be a quick process.

The company is working to secure debtor-in-possession financing that includes up to $750 million in a revolving credit facility and a loan facility of up to $1 billion.

As part of the plan, the company’s existing equity will be exchanged for 1% of new stock and three-year warrants to buy 10% of the new stock.

“Looks like they’re going to try getting through this as fast as possible,” a trader said. “Most of the creditors seem happy with this.”

Bristow crashes

Helicopter name Bristow’s issues crashed, traders said.

The 6¼% notes due 2022 was pushed 7¼ points lower to close at 11¾ bid.

On Saturday, the Houston-based offshore transportation name announced that it had filed for Chapter 11 bankruptcy.

Under the restructuring agreement, senior secured noteholders will receive a share of 100% of the equity interests in the reorganized company, minus the percentage of equity to be allocated to unsecured noteholders, a management incentive plan and a rights offering, Prospect News reported.

Unsecured noteholders and general unsecured creditors will receive a share of equity in the reorganized company in an amount to be agreed on by Bristow and the senior secured noteholders.

The filing was expected after the company announced last month that it had obtained waivers from creditors to delay interest payments on its maturities, a source said.

Oil futures lose

In a negative start to the week in oil futures, distressed energy tranches were mixed, market sources said.

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

The 6% paper due 2024 lost 1¼ points to close at 62 bid. The 8% paper due 2022, while moving as low as 77 during the session, ended level at 78 bid.

Houston-based producer Halcon Resources’ notes ended the day on an upward push.

The 6¾% notes due 2025 gained 1 point to close at 45½ bid.

West Texas Intermediate crude oil futures for June delivery saw a 62-cent fall to close at $61.04 per barrel.

North Sea Brent crude oil futures for July delivery finished at $70.23 per barrel after a 39-cent decline.

BB&B mixed, PetSmart negative

Elsewhere, in retail, Bed Bath & Beyond’s issues saw mixed results, traders said.

The 5.165% notes due 2044 jumped 3 points to close at 76 bid. The 4.915% notes due 2034 dropped 4¼ points to close at 75 bid.

Early Monday, the Union, N.J.-based retail chain announced that chief executive officer Steven Temares had resigned from his position effective immediately and vacated his seat on the board of directors.

The move comes after months of pressure from an activist investor group to increase profits and execute a turnaround.

Last month, the company appointed five independent board of directors at the group’s recommendation.

“The equity was all over the place today,” a trader said. “They’re going to get hit pretty hard this week.”

The board appointed long-time retail executive and recent board member Andrea Weiss as interim CEO.

Phoenix-based sector peer PetSmart’s paper finished the session on the negative side.

The 8 7/8% paper due 2025 fell 1½ points to close at 88 bid. The 5 7/8% paper due 2025 lost 1¼ points to close at 91 bid.

© 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.