Frontier under pressure; energy names trade down; retail rebounds

By Abigail W. Adams

Portland, Me., July 16 – Several names in the distressed debt space were active on Tuesday as crude oil futures tanked and company news sparked activity in certain names.

Frontier Communications Corp.’s capital structure was under pressure after the company announced it would not hold a Q&A on its earnings conference call.

Several energy names were trading off alongside crude oil futures as geopolitical tensions between the United States and Iran eased.

In the retail space, L Brands Inc.’s 6 5/8% senior notes due 2021 and Revlon Inc.’s 5¾% senior notes due 2021 were on the rise after retail sales for June beat analyst expectations.

Frontier under pressure

Frontier’s capital structure was under pressure on Tuesday with the notes trading off after the company announced it would not hold a Q&A session after its earnings conference call on Aug. 6, a market source said.

Frontier’s 11% senior notes due 2025 were down 1 point to 59½ in high volume activity, according to a market source.

The notes saw more than $21 million in volume, making it among the most actively traded issues in the secondary space.

The telecommunications company’s 10½% senior notes due 2022 were down 1¾ points to 64 with about $8 million on the tape.

While volume was light, Frontier’s 6 7/8% senior notes due 2025 were down 1½ points to 54¾.

The new levels were an all-time low for the company with credit default swaps pricing in a default on Frontier debt within five years, Bloomberg reported.

Energy trades off

Several energy names were trading off on Tuesday as crude oil futures plummeted.

California Resources Corp.’s bellwether 8% senior notes due 2022 dropped more than 2 points to change hands at 71 5/8 on Tuesday.

Chesapeake Energy Corp.’s 8% senior notes due 2025 were down 2 5/8 points to close the day around 88, according to a market source.

Chesapeake’s 5¾% senior notes due 2023 were down 1¾ points to 89½. The 7% senior notes due 2024 were down 1 5/8 points to 86.

The barrel price of WTI crude oil for August delivery saw a significant drop on Tuesday as Secretary of State Mike Pompeo calmed worries over tensions between Iran and the United States.

Crude oil futures settled at $57.62, a decrease of $1.96 or 3.29%.

A natural gas name, Southwestern Energy Co.’s 7½% senior notes due 2026 were also trading off on Tuesday.

The notes dropped almost 1½ points in high-volume activity.

They were changing hands around 91 7/8 in the late afternoon with more than $15 million in reported volume, according to a market source.

Retail rises

While the telecommunications and energy sectors were dragged down on Tuesday, the retail space was on the rise after June consumer data beat analyst expectations.

While volume was light, L Brands’ 6 5/8% senior notes due 2021 were up almost 1 point to 106½.

Revlon’s 5¾% senior notes due 2021 also rose 1 point to 93.

The notes were lifted by stronger than expected data for retail sales in June, according to a market source.

Retail sales rose 0.4% in June as opposed to the 0.1% expected by analysts, CNBC reported.

© 2015 Prospect News.
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