L Brands bonds active, mixed after earnings report; CBL eyed after delisting notice

By James McCandless

San Antonio, Aug. 22 – While volume was soft on Thursday, distressed debt trading was focused on news-driven names.

L Brands, Inc.’s notes diverged in direction after the company released its second-quarter earnings report.

Sector peer Bed Bath & Beyond Inc.’s issues strengthened in trading.

In the REIT space, CBL & Associates Properties, Inc.’s paper was mixed after it received a delisting notice.

While oil futures declined, Whiting Petroleum Corp.’s and California Resources Corp.’s notes showed varied movements as Valaris plc’s issues improved.

In the pharma space, Endo International plc’s paper also saw differing movements while Teva Pharmaceutical Industries Ltd.’s notes dipped.

Utilities name PG&E Corp.’s issues moved on a negative trend.

L Brands active

L Brands’ notes diverged in direction on Thursday, traders said.

The 6¾% senior notes due 2036 fell ½ point to close at 86½ bid. The 5¼% notes due 2028, while moving up to 93¼ bid during the day, closed level at 91¾ bid.

After the close on Wednesday, the Columbus, Ohio-based retailer released its second-quarter earnings report.

The company reported a 24 cents per share profit, higher than the 19 cents per share profit estimated by analysts.

Net sales were posted at $2.90 billion, lower than estimates.

Weighing on the name were its Victoria’s Secret segment’s 9% decrease in comparable sales.

The company also lowered its guidance for third-quarter earnings.

“There were a few other retailers posting earnings that were stronger,” a trader said. “Big box stores are performing, but it’s the department store names like L Brands that are continuing to underwhelm.”

Union, N.J.-based sector peer Bed Bath’s longer-term issues saw a positive day.

The 5.165% senior notes due 2044 picked up 1 point to close at 66½ bid. The 4.915% notes due 2034 added 1¼ points to close at 72¾ bid.

CBL notes mixed

Meanwhile, CBL’s paper was mixed, market sources said.

The 5¼% senior notes due 2023 rose ¼ point to close at 64¼ bid. The 4.6% paper due 2024 dipped ½ point to end at 64¼ bid.

The Chattanooga, Tenn.-based real estate investment trust announced on Wednesday that it had received a delisting notice for its common stock from the New York Stock Exchange.

The company said that it plans to put a stock split to a shareholder vote at its next annual meeting.

On Monday, the company announced the completion of a sale of a 25% stake in a property in El Paso for $27.75 million.

Oil names vary

Oil futures declined, though distressed energy tranches were non-cohesive, traders said.

Denver-based independent oil and gas producer Whiting’s notes traded down on the short end and slightly higher on the longer end.

The 6¼% senior notes due 2023 shaved off ½ point to close at 81 bid. The 6 5/8% notes due 2026 improved by ½ point to close at 77¾ bid.

Los Angeles-based producer California Resources’ issues were similar.

The 6% senior notes due 2024 held level at 43 bid. The 8% notes due 2022 rose 2½ points to close at 60¾ bid.

London-based contract driller Valaris’ paper improved.

The 5.2% senior notes due 2025 shot up 3 points to close at 63½ bid. The 7¾% paper due 2026 gained 2½ points to finish at 65 bid.

Oil futures saw tepid declines as the market awaited a speech from Federal Reserve chairman Jerome Powell.

West Texas Intermediate crude oil futures for October delivery dipped 33 cents to settle at $55.35 per barrel.

North Sea Brent crude oil futures for October delivery ended at $59.92 per barrel after a 38 cent loss.

Endo mixed; Teva dips

Elsewhere, pharma names saw differing movements, market sources said.

Endo’s 6% senior notes due 2023 improved by ½ point to close at 68 bid.

The Par Pharmaceutical Inc. 7½% senior secured notes due 2027 declined 1 point to close at 94½ bid.

Dublin-based drug producer Endo’s capital structure has seen positive attention this week after announcing on Tuesday that it had reached a $10 million settlement with two Ohio counties.

The suits had been brought over the company’s alleged involvement in the opioid epidemic.

As part of the settlement, the company will not admit any wrongdoing.

Petach Tikva, Israel-based generics name Teva’s issues dipped.

The 2.8% senior notes due 2023 dropped 1 point to close at 84 bid. The 3.15% notes due 2026 also fell 1 point to end at 74½ bid.

PG&E negative

In utilities, PG&E’s paper moved on a negative trend, traders said.

The 6.05% paper due 2034 slid 1¾ points to close at 108¼ bid.

The San Francisco-based bankrupt electric utility has seen increased scrutiny from the market this week after a bankruptcy judge ruled that victim lawsuits against the company for wildfire damages could proceed in court.

As a result, the company has been exposed to an additional $18 billion in potential risk.

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