Frontier down as rights plan implemented; Weatherford lower on ratings downgrade

By James McCandless

San Antonio, July 2 – In the Tuesday session, the distressed space saw more trading in telecom and energy names.

Frontier Communications Corp.’s notes headed downward after adopting a shareholder rights plan.

Sector peer Digicel Group Ltd.’s issues fell as the company grapples with its increasing debt.

Meanwhile, in energy, Weatherford International plc’s paper moved lower as it received a ratings downgrade a day after filing for bankruptcy.

As oil futures dived, California Resources Corp.’s notes also declined as Ensco Rowan plc’s and Superior Energy Services, Inc.’s issues finished mixed.

In retail, Revlon, Inc.’s paper was mixed a day after receiving a $30 million credit line.

L Brands, Inc.’s notes were also mixed.

Medical staffing name Envision Healthcare’s issues gained.

Frontier, Digicel down

Telecom name Frontier’s notes spent the day headed downward, traders said.

The 10½% senior unsecured notes due 2022 took off 1 point to close at 67¼ bid. The 11% notes due 2025 lost ½ point to close at 62¼ bid.

The Norwalk, Conn.-based wireline communications name announced that it had adopted a shareholder rights plan that would protect the availability of its net operating loss carryforwards.

The plan entails offering current shareholders of common stock the opportunity to purchase more at a 50 percent discount if any group acquires 4.9% or more of the stock, a situation that would trigger an ownership change and limit the company’s ability to offset its federal taxable income in the future.

“They’re trying to not get bought out,” a trader said.

The company is currently in the process of exploring options that include a restructure, an out-of-court debt swap or an outright bankruptcy.

Kingston, Jamaica-based mobile phone network provider Digicel’s issues were also negative.

The 6¾% senior unsecured notes due 2023 fell 1½ points to close at 55½ bid. The 8¼% notes due 2022 shed ¼ point to close at 55¼ bid.

Weatherford lower

Meanwhile, in the energy space, Weatherford’s paper went lower, market sources said.

The 9 7/8% senior unsecured notes due 2024 declined by 1¾ points to close at 48¼ bid. The 8¼% notes due 2023 lost 1¼ points to close at 49¼ bid.

Following its bankruptcy filing on Monday, S&P Global Ratings issued downgrades for the Baar, Switzerland-based oilfield services provider on Tuesday.

The agency lowered the company’s overall rating to D from CC and lowered issue-level ratings.

The company filed for Chapter 11 bankruptcy after receiving approval from creditors for a restructuring agreement over the weekend.

Part of the plan would see the exchange of $7.4 billion of senior unsecured notes for about 99% of the equity in the company and $1.25 billion of new tranche B senior unsecured notes.

Oil dives

As oil futures saw a dive, distressed energy tranches trended negative, traders said.

Los Angeles-based independent oil and gas producer California Resources’ notes declined.

The 8% senior unsecured notes due 2022 lost 2 points to close at 73½ bid.

London-based contract driller Ensco Rowan’s issues closed mixed.

The 5.2% senior unsecured notes due 2025 slid 1¾ points to close at 73¼ bid. The 7¾% notes due 2026 added 1½ points to close at 76¾ bid.

Houston-based oilfield services name Superior Energy’s paper also finished mixed.

The 7 1/8% senior unsecured paper due 2021 gave back 1¼ points to close at 69¾ bid. The 7¾% paper due 2024 garnered ½ point to close at 65 bid.

West Texas Intermediate crude oil futures for August delivery lost $2.84 by the end of the day, settling at $56.25 per barrel.

North Sea Brent crude oil futures for September delivery finished at $62.40 per barrel after a $2.66 loss.

Revlon, L Brands mixed

Elsewhere, in retail, Revlon’s notes saw mixed results, market sources said.

The 5¾% senior unsecured notes due 2021 shaved off ¼ point to close at 90¼ bid. The 6¼% notes due 2024 jumped up 3 points to close at 71¼ bid.

On Monday, the New York City-based cosmetics producer announced that it had received a $30 million boost in the form of a credit facility.

Columbus, Ohio-based retailer L Brands’ issues were also mixed.

The 6¾% senior unsecured notes due 2036 rose 1¼ points to close at 88¾ bid. The 5¼% notes due 2028 fell ¼ point to close at 93½ bid.

Envision gains

In health care, Envision’s paper was seen gaining, traders said.

The 8¼% senior unsecured paper due 2026 tacked on 1¼ points to close at 72½ bid.

The Nashville-based heath care staffing name’s structure has been under pressure over the last few months as the issue of balance billing or “surprise billing” comes into focus.

The United States government is currently wrangling with what to do about the practice of billing medical patients for services that are out of their insurance network but were unbeknownst to the patient at the time.

© 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.