Teva lower as company settles suit; Navios mixed amid debt swap

By James McCandless

San Antonio, May 28 – The distressed space saw movement pinned to newsmakers to start off a short week.

Teva Pharmaceutical Industries Ltd.’s notes traded lower after the company settled a lawsuit brought by the state of Oklahoma over the opioid epidemic.

Sector peer Mallinckrodt plc’s issues were mixed after it announced that it would be spinning off its generic drugs unit.

Shipping name Navios Maritime Holdings Inc.’s paper finished mixed amid the company’s execution of a debt buyback.

Meanwhile, in retail, L Brands, Inc.’s notes were also mixed as the market continues to react to its surprisingly positive first-quarter earnings.

Elsewhere in the space, Bed Bath & Beyond, Inc.’s issues were moving higher.

In energy, the sector’s distressed tranches did not follow oil futures up as California Resources Corp.’s and Ensco Rowan plc’s paper ended mixed and Weatherford International plc’s notes slipped.

Exela Intermediate LLC, a subsidiary of Exela Technologies Inc., saw its issues improve after a precipitous fall last week.

Teva lower

Teva’s notes were moving lower in Tuesday’s session, traders said.

The 3.15% notes due 2026 dropped 1¾ points to close at 78¼ bid. The 4.1% notes due 2046 lost 2 points to close at 67¼ bid.

The 3.15% notes saw $44 million changing hands by the end of trading.

On Sunday, news broke that the Petach Tikva, Israel-based generic drug manufacturer has reached a settlement with the state of Oklahoma over allegations of its involvement in the propagation of the opioid epidemic.

The company said it would pay the state $85 million.

Trial proceedings were scheduled to begin this week.

“It’s a bit of an outsized payout,” a trader said. “I guess they think that whatever they can do to quash any more negative headlines the better.”

Recently, the company’s structure was pushed lower after a majority of U.S. states announced that it would be suing the name and 19 other companies for alleged antitrust violations.

Mallinckrodt mixed

Elsewhere in the sector, Mallinckrodt’s issues were mixed, market sources said.

The 5¾% notes due 2022 gained 1 point to close at 82¼ point. The 5½% notes due 2025 fell 1 point to close at 66 bid.

The Staines-upon-Thames, England-based drug maker announced Tuesday morning that it would spin off its generic drugs segment before the end of the year.

In December 2018, the company said that it would either pursue a spinoff or a sale of the unit.

The proposed new entity would be called Mallinckrodt Inc. while the existing company would be renamed Sonorant Therapeutics plc.

The company is still weathering market scrutiny that arose last week after it announced a legal challenge against United States health care authorities over rebates on its popular Acthar Gel drug.

Navios mixed

Elsewhere, Navios’ paper also finished the day mixed, traders said.

The 11¼% paper due 2022 rose ½ point to close at 67 bid. The 7 3/8% paper due 2022 shaved off ¼ point to close at 63¾ bid.

On Tuesday, the Monaco-based shipping name held its first-quarter earnings call. During the call, the company mentioned that it exchanged series G and series H preferred stock last quarter and announced the extension of $39.5 million of bank debt.

In addition, Navios South American Logistics Inc. repurchased $35.5 million of its 7 3/8% first-priority ship mortgage notes due 2022 during March in open-market transactions for $17.6 million.

L Brands mixed, BB&B higher

Meanwhile, in retail, L Brands notes were another name that closed mixed, market sources said.

The 6¾% notes due 2036, while moving up to 86½ bid during the session, settled back to its previous level of 86¼ bid. The 5¼% notes due 2028 added ¾ point to close at 90¼ bid.

The Columbus, Ohio-based retailer has seen its structure make a positive run after beating expectations with its first-quarter earnings last week.

With the market expecting the name to break even, it reported a 14 cents per share profit.

“They’re still riding that wave,” a trader said.

Union, N.J.-based sector peer Bed Bath & Beyond’s issues ended higher.

The 5.165% notes due 2044 rose 2½ points to close at 72 bid. The 4.915% notes due 2034 tacked on ¼ point to close at 76 bid.

Oil names mixed

Despite a positive day for oil futures, distressed energy tranches saw mixed movements, traders said.

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

The 6% notes due 2024 shed ¼ point to close at 65 bid. The 8% notes due 2022 gained 1½ points to close at 75½ bid.

London-based contract driller Ensco Rowan’s notes also settled mixed.

The 5.2% notes due 2025 fell 1 point to close at 70¼ bid. The 7¾% notes due 2026 rose ¼ point to close at 77½ bid.

Baar, Switzerland-based oilfield service name Weatherford’s issues declined.

The 8¼% notes due 2023 dropped 2¼ points to close at 54½ bid. The 9 7/8% notes due 2024 declined by ¼ point to close at 55 bid.

West Texas Intermediate crude oil futures for July delivery closed 51 cents better, ending the day at $59.14 per barrel.

North Sea Brent crude oil futures for July delivery shot up to $70.11 per barrel after a $1.42 rise.

Exela improves

Exela’s paper saw an improvement after a few declining days, market sources said.

The 10% notes due 2023 gained 2½ points to close at 80¼ bid.

Over the previous two trading days, the 10% paper lost a combined 10¾ points.

The losses were in reaction to a string of negative headlines for the Irving, Texas-based business software name.

After an earnings report that highlighted declining revenues, Moody’s Investors Service downgraded its corporate family rating and issue-level ratings.

© 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.