Titan notes decline after posting Q4 loss; Uniti rises as ratings put on positive watch

By James McCandless

San Antonio, March 4 – Trading in the distressed debt space was centered on names in the telecom and energy sectors on Wednesday.

Titan International, Inc.’s notes declined after the company posted disappointing results in its fourth-quarter earnings report.

Meanwhile, REIT Uniti Group Inc.’s issues rose in the afternoon after a ratings agency put its ratings on positive watch.

In the telecom space, Intelsat SA’s paper drifted lower as the market weighs in on its standing in a C-band spectrum auction.

Sector peer GTT Communications Inc.’s notes gained ground.

Pharmaceutical name Mallinckrodt plc’s issues were under pressure a day after the government filed a lawsuit against the company.

Generic drug maker Endo International plc’s paper varied.

Negativity in oil futures were followed by Chesapeake Energy Corp.’s and California Resources Corp.’s notes while Whiting Petroleum Corp.’s issues diverged.

Titan down

Titan International’s notes declined as the day came to a close, traders said.

The 6½% notes due 2023 fell by 4¾ points to close at 67½ bid.

Before the market opened on Wednesday, the Quincy, Ill.-based commercial vehicle parts name released a disappointing fourth-quarter earnings report.

The company reported earnings of 40 cents per share, wider than what analysts expected at a 9 cents per share loss.

Revenues were underperforming at $301.79 million.

This is the latest in a string of negative quarters for the company, posting consistent losses in the last year.

“It’s probably a combination of where trade was a few months ago and the coronavirus now that may be affecting their international operations,” a trader said.

Uniti rises

Meanwhile, property name Uniti’s issues rose, market sources said.

The 7 7/8% senior secured notes due 2025 gained ¾ point to close at 105½ bid. The 8¼% senior notes due 2023 picked up ½ point to close at 96½ bid.

During the Wednesday session, S&P Global Ratings announced that it had placed all of the Little Rock, Ark.-based real estate investment trust’s ratings on CreditWatch positive.

The agency cited the recent settlement with large customer Windstream as a settler of uncertainty, making the company’s ability to meet its financial commitments increasingly likely.

S&P expects to change its ratings for the better when the settlement is executed.

On Monday, the two sides agreed to settle litigation over a variety of subjects, including rental rates.

The new agreement establishes rental rates for the first year and includes steady increases for every following year.

Intelsat lower, GTT up

In the telecom space, Intelsat’s paper drifted lower, traders said.

Intelsat Jackson Holdings SA’s 8½% senior paper due 2024 fell 2¾ points to close at 84 bid. The 9½% senior paper due 2023 dropped 3¾ points to close at 56¼ bid.

The two tranches combined to see about $58 million change hands.

Almost a week after the Federal Communications Commission voted to establish parameters for a C-band spectrum auction, the market is weighing in on its potential effect on the Luxembourg-based satellite operator.

In a note, a Height Capital analyst said that while the company is set to receive a smaller-than-expected $4.85 billion in auction revenue, it may benefit from outside deals worked out with mobile providers to stave off a potential bankruptcy.

Despite a sustained lobbying effort to increase Intelsat’s revenue share and a push by a large investor to file for bankruptcy, the FCC maintained its support for its initial proposal.

The auction is expected to start in December.

“I’ve said before that I think they will limp through this year,” a trader said. “The situation unfolding now seems to confirm that.”

McLean, Va.-based cloud networking name GTT’s notes gained ground.

The 7 7/8% senior notes due 2024 picked up ¾ point to close at 77¾ bid.

Mallinckrodt lower

Pharmaceutical name Mallinckrodt’s issues were under pressure, market sources said.

The 5¾% senior notes due 2022 shed 3 points to close at 73 bid. The 5 5/8% senior notes due 2023 was docked 2 points to close at 51½ bid.

Over the last two trading days, the Staines-upon-Thames, U.K.-based drug maker’s structure has taken a hit after the U.S. government announced that it had filed a lawsuit against the company for allegedly defrauding Medicaid.

Specifically, the government alleges that subsidiary Mallinckrodt ARD LLC artificially raised the price of Acthar Gel, one of the company’s highest grossing products.

Dublin-based generics name Endo’s paper varied in direction.

The 6% senior notes due 2025 rose 2½ points to close at 78¾ bid. The 6% senior paper due 2023 held level at 83¾ bid.

Crude futures sink

A day of negativity in oil futures led to a similar trend in energy names, traders said.

West Texas Intermediate crude oil futures for April delivery lost 40 cents to settle the day at $46.78 per barrel.

North Sea Brent crude oil futures for May delivery finished at $51.13 per barrel after a 73 cent dip.

Oklahoma City-based independent oil and gas producer Chesapeake Energy’s notes went the way of crude futures.

The 8% senior notes due 2025 lopped off 4½ points to close at 28 bid. The 11½% notes due 2025 declined by 5 points to close at 51½ bid.

Los Angeles-based producer California Resources’ issues joined the negativity.

The 6% senior notes due 2024 shaved off ¼ point to close at 22 bid. The 8% senior secured notes due 2022 lost ½ point to close at 23¼ bid.

Denver-based peer Whiting Petroleum’s paper diverged.

The 6¼% senior notes due 2023 picked up 1 point to close at 46¼ bid. The 6 5/8% senior paper due 2026 edged ¼ point lower to close at 38 bid.

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