Bed Bath & Beyond down as earnings anticipated; Range Resources lower in energy space

By James McCandless

San Antonio, Jan. 8 – More news out of the retail and energy sectors drove much of distressed trading on Wednesday.

Bed Bath & Beyond Inc.’s notes headed downward in anticipation of the company’s third-quarter earnings report.

Sector peer Rite Aid Corp.’s issues were elevated by the close.

Meanwhile, in the oil and gas space, Range Resources Corp.’s paper saw negativity as it shops an offering for new senior notes.

Oil futures dropped, mirrored by the movements by Antero Resources Corp.’s, Oasis Petroleum Inc.’s and Whiting Petroleum Corp.’s notes.

Automotive name Tenneco Inc.’s issues shifted lower after announcing an executive change and potential weakness.

In telecom, satellite operator Intelsat SA’s paper improved while wireline name Frontier Communications Corp.’s notes fell.

Bed Bath down

Bed Bath & Beyond’s notes were seen headed downward on Wednesday, traders said.

The 5.165% senior notes due 2044 sank 4¼ points to close at 69½ bid. The 4.915% senior notes due 2034 dropped 5 points to close at 74 bid.

The Union, N.J.-based department store chain’s structure was active in the run-up to the company’s after-hours third-quarter earnings release.

After the close, it reported a loss of 38 cents per share, falling short of what analysts expected to be a 2 cents per share profit.

Revenues were underwhelming at $2.76 billion.

Same-store sales contracted by 8.3%.

In a statement, chief executive officer Mark Tritton said that the company’s performance “was unsatisfactory and underscores the imperative for change and strengthens our sense of priorities and purpose.”

Camp Hill, Pa.-based sector peer Rite Aid’s issues were elevated.

The 6 1/8% senior notes due 2023 rose 1 point to close at 92¾ bid.

Range negative

Meanwhile, in the oil and gas space, Range Resources’ paper saw negativity, market sources said.

The 4 7/8% senior notes due 2025 shed 1¾ points to close at 86¼ bid.

On Wednesday, the Fort Worth, Tex.-based independent oil and gas producer is expected to price a $500 million offering of six-year senior notes, Prospect News reported.

Initial talk has the notes coming to yield in the low 9% area.

Concurrently, the company said it has begun cash tender offers to purchase up to $500 million of its outstanding 5¾% senior notes due 2021, 5 7/8% senior notes due 2022 and 5% senior notes due 2022.

Range announced on Tuesday that it would be slashing its drilling budget for the year and cancelling its dividend.

Oil drops

Distressed energy tranches’ movements mirrored crude oil futures, traders said.

As recent tensions between the United States and Iran seemed to cool on Wednesday, crude futures fell off of recent gains.

West Texas Intermediate crude oil futures for February delivery sank $3.09 to settle at $59.61 per barrel.

North Sea Brent crude oil futures for March delivery finished at $65.44 per barrel after a $2.83 dive.

Denver-based producer Antero Resources’ notes moved lower with futures.

The 5 5/8% senior notes due 2023 lost 2½ points to close at 75 bid. The 5% senior notes due 2025 declined by 2¾ points to close at 69¾ bid.

Houston-based peer Oasis Petroleum’s issues tracked negatively.

The 6¼% senior notes due 2026 slid 3 points to close at 86½ bid.

Whiting Petroleum, another Denver-based producer, saw its paper follow the sector trend.

The 6¼% senior paper due 2023 shed 2 points to close at 88 bid. The 6 5/8% senior notes due 2026 moved down 2¾ points to close at 72½ bid.

Tenneco off

Automotive name Tenneco’s notes closed in a weaker position, market sources said.

The 5% senior notes due 2026 shifted down 3 points to close at 90 bid.

After the close on Tuesday, the Lake Forest, Ill.-based auto parts maker announced the departure of co-CEO Roger Wood and said that it faced ongoing challenges that would affect its plans to break up its business as previously planned.

The company had previously stated that if weakness persists, the sale of its powertrain unit would be difficult to complete.

Earlier this week, an activist investor wrote a letter to the company’s board calling for the replacement of half its members while urging them to sell part or all of the company.

Intelsat up, Frontier down

In telecom, Intelsat’s issues improved as the afternoon ended, traders said.

Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 gained ¾ point to close at 61¾ bid. The 9½% senior notes due 2023 picked up ½ point to close at 72¾ bid.

As the Luxembourg-based satellite operator and other names like it wait for the Federal Communications Commission to set terms for an auction of C-band spectrum, the company’s structure continues to remain active.

“Until we get some news on that, the bonds are in a kind of holding pattern,” a trader said. “I think we will see more significant movement when the revenue split becomes clearer.”

Norwalk, Conn.-based wireline communicator Frontier’s paper fell.

The 10½% senior notes due 2022 shaved off ½ point to close at 47¼ bid. The 11% senior paper due 2025 declined 1¼ points to close at 47½ bid.

© 2015 Prospect News.
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