L Brands bonds lower after analyst downgrade; Endo paper declines in pharma space

By James McCandless

San Antonio, Aug. 23 – The distressed debt market finished the week with much of the same trading patterns that permeated through the week.

L Brands, Inc.’s notes traded lower after an analyst downgrade in response to its second-quarter earnings report.

Sector peer Bed Bath & Beyond Inc.’s traded mixed, depending on the tranche.

Pharma name Endo International plc’s paper declined after a week of heightened attention over an opioid lawsuit settlement.

Generic drug maker Teva Pharmaceutical Industries Ltd.’s notes trended negative.

Oil futures fell amid trade tensions. And Whiting Petroleum Corp.’s, Oasis Petroleum Inc.’s and Chesapeake Energy Corp.’s notes all weakened.

REIT CBL & Associates Properties, Inc.’s paper heading in diverging directions, depending on the tranche.

Meanwhile, in utilities, PG&E Corp.’s notes were active but unchanged.

L Brands lower

L Brands’ notes moved lower to end the week, traders said.

The 6¾% senior notes due 2036 dropped 2¼ points to close at 84¼ bid. The 5¼% senior notes due 2028 shaved off ¾ point to close at 91 bid.

On Friday, analysts at RBC downgraded the Columbus, Ohio-based retail name to sector perform from outperform.

The analysts cited their concern over growing inventories in the company’s Victoria’s Secret division combined with the company’s plan to have fewer promotions during the holiday shopping season.

Late Wednesday, the company released its second-quarter earnings.

Earnings per share were pegged at a 24 cent profit, better than the expected 19 cents per share.

Net sales were dragging at $2.90 billion.

Victoria’s Secret sales were 9% lower compared to this time last year.

“They have to do something about Victoria’s Secret,” a trader said. “If it continues to trend that way, they might want to consider a sale.”

Union, N.J.-based peer Bed Bath’s issues saw varied movements.

The 5.165% senior notes due 2044 fell 1¼ points to close at 65¼ bid. The 4.915% notes due 2034 gained 1¼ points to close at 74 bid.

Endo, Teva negative

In the pharma space, Endo’s paper declined, market sources said.

The 6% senior notes due 2023 declined by 1¾ points to close at 66¼ bid. The Par Pharmaceutical Inc. 7½% senior secured notes due 2027 lost 1½ points to close at 93 bid.

This week, Endo, the Dublin-based drug manufacturer, saw heightened positive attention after news broke on Tuesday that it had reached a $10 million settlement with two Ohio counties over opioid-related litigation.

The sector has been marred by legal challenges over its role in the opioid epidemic.

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

Petach Tikva, Israel-based generics name Teva’s notes trended negative.

The 2.8% senior notes due 2023, while shifting lower to 82½ during the day, ended level at 84 bid. The 3.15% notes due 2026 fell 1¼ points to close at 73¼ bid.

Oil falls

As trade tensions between the United States and China escalated on Friday, futures and distressed sector tranches were under water, traders said.

Denver-based independent oil and gas producer Whiting’s issues trailed.

The 6¼% senior notes due 2023 lost 2 points to close at 79 bid. The 6 5/8% notes due 2026 gave back 2¾ points to close at 75 bid.

Houston-based producer Oasis’ paper followed the trend.

The 6 7/8% senior notes due 2023 dipped 1 point to close at 88¼ bid. The 6 7/8% senior paper due 2022 slipped 1¾ points to finish at 89½ bid.

Oklahoma City-based peer Chesapeake Energy’s notes declined.

The 8% senior notes due 2025 lopped off 1¾ points to close at 75 bid.

News broke on Friday that China would impose a 5% tariff on U.S. crude oil imports.

West Texas Intermediate crude oil futures for October delivery saw a $1.18 drop to end the week at $54.17 per barrel.

North Sea Brent crude oil futures for October delivery closed at $59.34 per barrel after a 58 cent loss.

CBL diverges

CBL’s issues saw a divergence at the end of the week, market sources said.

The 5¼% senior notes due 2023 added ¼ point to close at 64½ bid. The 4.6% paper due 2024 lost 1¾ points to close at 62½ bid.

On Wednesday, the Chattanooga, Tenn.-based retail-focused real estate investment trust announced that it was working to rectify a potential delisting for its common stock from the New York Stock Exchange.

The company plans to put a stock split to a shareholder vote.

It also said this week that it completed a $27.75 million sale of a 25% stake in a property in El Paso, Tex.

PG&E flat

Utilities name PG&E’s paper was active but unchanged, traders said.

The 6.05% notes due 2034 held level at 108¼ bid.

Trading in the San Francisco-based bankrupt electric utility was volatile after a bankruptcy judge ruled on Friday that wildfire victim lawsuits against the company could proceed, exposing the name to up to $18 billion in potential liabilities.

© 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.