Party City dives after earnings miss; Teva trades mixed on guidance, CFO appointment

By James McCandless

San Antonio, Nov. 7 – A new batch of earnings releases drove distressed debt trading on Thursday.

Party City Holdco Inc.’s notes dived after the company reported dismal third-quarter earnings on Thursday.

Meanwhile, in pharma, Teva Pharmaceutical Industries Ltd.’s issues varied after reporting its earnings, highlighted by improved guidance and an executive hire.

Sector peer Mallinckrodt plc’s paper was under pressure.

Utilities name PG&E Corp.’s notes declined as its earnings release was highlighted by steep costs due to recent wildfires and its bankruptcy.

Elsewhere, auto parts name Adient plc’s issues received a boost after surpassing analyst estimates for third-quarter earnings.

In communications, CommScope Holding Co. Inc.’s paper gained on the back of its positive third-quarter results.

Oil and gas producer Denbury Resources, Inc.’s notes rose as it met analyst expectations for the third quarter.

As oil futures performed better, Whiting Petroleum Corp.’s issues were lifted while Chesapeake Energy Corp.’s paper saw mixed results.

Party City dives

Party City’s notes dived throughout the Thursday session, traders said.

The 6 5/8% senior notes due 2026 crashed 15¼ points to close at 81¼ bid. The 6 1/8% senior notes due 2023 slid 10¼ points to close at 90½ bid.

The 6 5/8% notes saw about $36 million trading.

On Thursday morning, the Elmsford, N.Y.-based party supplies retailer released a dismal third-quarter earnings report and cut its guidance.

The company showed a loss of 28 cents per share, well below analyst predictions of a 1 cent per share profit.

Revenues were also underwhelming at $540.2 million.

The company laid the blame on a persistent helium shortage and weak Halloween sales.

“That’s what the company is all about,” a trader said. “If they can’t get that straight, then those bonds are going to be depressed further.”

Teva notes active

Meanwhile, in the pharma space, Teva’s issues varied, market sources said.

The 6¾% senior notes due 2028 lost 2¾ points to close at 92¼ bid. The 2.2% senior notes due 2021 inched up ¼ point to close at 96¼ bid.

The Petach Tikva, Israel-based generic drug producer’s structure gained after releasing earnings early Thursday.

A profit of 58 cents per share was posted, falling just shy of the analyst estimated 60 cents per share profit.

Revenues exceeded expectations at $4.26 billion.

The company stressed that it would not encounter difficulties in paying down its debt if it were made to pay billions of dollars in settlements in opioid-related litigation, raising its guidance.

A proposed blanket settlement for any outstanding lawsuits is valued by the name at $23 billion.

Concurrently, Eli Kalif was appointed chief financial officer.

Staines-upon-Thames, England-based sector peer Mallinckrodt’s paper moved down.

The 5¾% senior notes due 2022 dived 6½ points to close at 28½ bid. The 5½% senior notes due 2025 gave back 3¼ points to close at 26 bid.

PG&E off

Utilities name PG&E’s notes were in decline, traders said.

The 6.05% notes due 2034 shaved off ¾ point to close at 104 bid. The 3.3% senior notes due 2027 went negative by ¾ point to close at 95 bid.

The losses came despite positivity from the San Francisco-based bankrupt electric utility’s third-quarter earnings report.

The company revealed a profit of $1.11 per share, higher than the 99 cents per share that was expected.

Revenues outperformed at $4.43 billion.

“That’s just the top line,” a trader said. “Nobody was focused on that.”

What drew ire from the market was the $6.3 billion in after-tax costs driven by its handling of recent wildfires and its bankruptcy case.

It is also under pressure to come to a resolution in a restructuring dispute between creditors and shareholders, with California governor Gavin Newsom threatening a state takeover if a compromise is not reached soon.

Adient up

Automotive name Adient’s issues saw a boost, market sources said.

The 4 7/8% senior notes due 2026 added 2¾ points to close at 85 bid.

The Dublin-based auto parts manufacturer joined the crowd releasing third-quarter results as the market opened on Thursday.

The company showed a profit of 63 cents per share, outpacing analysts’ predictions of a 25 cents per share profit.

Revenues fell short at $3.92 billion.

“They’re on the right track,” a trader said. “I think the mood on it is cautiously optimistic until the next few quarters establish a more solid base to go on.”

CommScope gains

In communications, CommScope’s paper was seen gaining, traders said.

The 6% senior paper due 2026 picked up 5¾ points to close at 93½ bid. The 5% senior notes due 2027 rose 1¾ points to close at 82½ bid.

The Hickory, N.C.-based communications infrastructure name added its earnings report to the Thursday morning pile.

For the third quarter, the company showed a 55 cents per share profit, better than the expected 45 cents per share profit.

Revenues missed the mark at $2.38 billion.

Denbury rises

Oil and gas name Denbury Resources’ notes were on the rise, market sources said.

The 9% notes due 2021 improved by ½ point to close at 89 bid. The 4 5/8% senior subordinated notes due 2023 tacked on 2¾ points to close at 44½ bid.

The Plano, Tex.-based independent oil and gas producer joined the earnings fray on Thursday.

The company’s third-quarter report outlined a profit of 8 cents per share, matching analyst predictions.

Revenues beat the consensus at $315.45 million.

Futures improve

A positive performance from oil futures was the backdrop for mixed results in distressed energy tranches, traders said.

West Texas Intermediate crude oil futures for December delivery climbed 80 cents to settle at $57.15 per barrel.

North Sea Brent crude oil futures for January delivery closed at $62.29 per barrel after rising by 55 cents.

Denver-based producer Whiting Petroleum’s issues were lifted.

The 6¼% senior notes due 2023 gained 1 point to close at 74 bid. The 6 5/8% senior notes due 2026 gained ½ point to close at 66¾ bid.

Oklahoma City-based peer Chesapeake Energy’s paper yielded mixed results.

The 8% senior notes due 2025 held level at 55¾ bid. The 8% senior paper due 2027 garnered 1¼ points to close at 54½ bid.

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