Whiting driven down amid quarterly loss; J.C. Penney notes eyed in retail sector

By James McCandless

San Antonio, Feb. 27 – As the spread of the coronavirus preoccupied markets, the distressed debt space saw blanket weakness.

Whiting Petroleum Corp.’s notes were driven down after reporting a loss for the fourth quarter.

Sector peer California Resources Corp.’s issues trailed despite posting a profit in its latest earnings report.

Compounding coronavirus fears led to weaker oil futures, and Antero Resources Corp.’s and Chesapeake Energy Corp.’s paper followed the trend downward.

Meanwhile, department store name J.C. Penney Co., Inc.’s notes varied after reporting a Q4 earnings beat while warning of lower sales in 2020.

Retailer L Brands, Inc.’s issues also diverged as its earnings for the fourth quarter were among the latest to be released.

In the pharma sector, Endo International plc’s paper saw a second day of negativity in the shadow of positive earnings.

Generics producer Mallinckrodt plc’s notes were also under pressure.

Utilities company PG&E Corp.’s issues declined as a bankruptcy court hears arguments on emergency management claims.

Whiting down

Whiting Petroleum’s notes were driven down throughout Thursday, traders said.

The 6¼% senior notes due 2023 dropped 5½ points to close at 45 bid. The 6 5/8% senior notes due 2026 were pushed down 5¾ points to close at 36½ bid.

Before the market opened on Thursday, the Denver-based independent oil and gas producer reported a loss for the fourth quarter.

The company reported a 22 cents per share loss, narrower than the 44 cents per share loss that analysts were expecting.

Revenues were also higher than predicted at $380.6 million.

The company has seen a reduction in average crude production and lower commodities prices.

“On a normal day, these bonds might’ve picked up a few points,” a trader said. “But everyone’s pulling out of beta energy.”

CalRes trails

Sector peer California Resources’ issues trailed, market sources said.

The 6% senior notes due 2024 lost 2 points to close at 23 bid. The 8% senior secured notes due 2022 slipped 1¾ points to close at 23¼ bid.

Posting fourth-quarter results late Wednesday, the Los Angeles-based energy producer was another name to beat expectations.

Earnings per share came in at a 73 cents per share profit, higher than the 60 cents per share that was the consensus.

Revenues were underwhelming at $610 million.

Oil negative

More worries about the coronavirus led to depressed oil futures, traders said.

West Texas Intermediate crude oil futures for April delivery sank $1.64 to close at $47.09 per barrel.

North Sea Brent crude oil futures for April delivery finished the session at $52.18 per barrel after a $1.25 loss.

“I think we may reach a floor at 40 or 41,” a trader said. “That’s when the weaker names might have to consider an exchange to stay afloat.”

Denver-based peer Antero Resources’ paper followed futures into weaker territory.

The 5 1/8% senior paper due 2022 shed 3 points to close at 64 bid. The 5% senior notes due 2025 gave back 4½ points to close at 52½ bid.

Oklahoma City-based producer Chesapeake Energy’s notes joined the sector trend.

The 11½% notes due 2025 dived 7½ points to close at 60 bid. The 4 7/8% senior notes due 2022 dipped 6¾ points to close at 54 bid.

J.C. Penney varies

Meanwhile, in retail, J.C. Penney’s issues varied in direction, market sources said.

The 8 5/8% notes due 2025 shaved off ¾ point to close at 56½ bid. The 5 7/8% senior secured notes due 2023 gained ¾ point to close at 86 bid.

The Plano, Tex.-based department store chain weighed in with its fourth-quarter earnings report on Thursday morning.

Where analysts were expecting a loss of 8 cents per share, the company showed a profit of 13 cents per share.

Its $3.49 billion in revenues also topped estimates.

Despite the positivity, the company warned that it projects to have a larger-than-expected decline in comparable-store sales through the year.

In an earnings call, the company said it expects to close six stores in 2020.

L Brands mixed

Retailer L Brands’ paper also diverged during Thursday’s activity, traders said.

The 6¾% senior notes due 2036 held level to close at 102½. The 5¼% senior paper due 2028 slipped 2¾ points to close at 96¼ bid.

After the close on Wednesday, the Columbus, Ohio-based retail name was among the companies releasing fourth-quarter earnings.

With its $1.88 per share profit for the quarter, L Brands did slightly better than what analysts had predicted at $1.86 per share.

Revenues came in at $4.71 billion.

The company’s structure has been active after the company announced last week that it would sell a majority stake of its Victoria’s Secret brand to a private equity firm.

After the sale closes, chief executive officer Leslie Wexner plans to resign.

Endo, Mallinckrodt off

In the pharmaceuticals sector, Endo’s notes saw more negativity, market sources said.

The 6% senior notes due 2025 declined by 1¼ points to close at 78 bid. The 6% senior notes due 2023 lost 4 points to close at 80½ bid.

The losses come despite the Dublin-based drug maker’s Wednesday morning release of its earnings for the fourth quarter.

The company’s fourth quarter was highlighted by a 74 cents per share profit and $764.8 million in revenue, both outpacing estimates.

Overall, the company’s structure has trended upward after it announced that executive Blaise Coleman would fill its CEO role.

Dublin-based generics producer Mallinckrodt’s issues were also under pressure.

The 5¾% senior notes due 2022 fell ½ point to close at 77½ bid. The 4 7/8% senior notes due 2020 shed 1¾ points to close at 94¼ bid.

PG&E lower

Utilities company PG&E’s paper was trending lower, traders said.

The 6.05% notes due 2034 shaved off ¼ point to close at 115½ bid.

In bankruptcy court on Wednesday, the San Francisco-based electric utility argued for a reduction in the amount that it may have to reimburse state and federal emergency management agencies for services rendered during recent wildfires.

The Federal Emergency Management Agency is seeking $3.9 billion while its California counterpart has petitioned for $2.4 billion.

The judge in the company’s case is open to reducing the claims to $290 million.

On Tuesday, the utility said that it was seeking to raise up to $25.68 billion via securities sale.

© 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.