Laredo, Transocean bonds weak; AMC gives back gains; Endo declines; Mallinckrodt up

By Cristal Cody

Tupelo, Miss., Aug. 11 – Laredo Petroleum, Inc.’s new 7¾% senior notes due July 2029 (B3/B) with a yield of nearly 10% continue to be eyed in the distressed space as the paper sank further on Wednesday.

“They’re pretty close to their lows at this point,” a trader said. “It’s the name in general. It limped out of the gates.”

The bonds were quoted Wednesday down about ¼ point after hitting lows in the 89½ bid range on Monday.

Bonds in the energy space have remained mostly softer in August, sources report.

Transocean Inc.’s 8% debentures due 2027 (C/CCC) fell ½ point over the day and were down about 15 points from a month ago.

“Energy has been picked on for the last five, six weeks,” a source said.

Elsewhere, AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/C) gave back some early week gains and were down 1 point on the day.

In the distressed pharmaceuticals space, Endo International plc’s notes remained soft with the 6% senior notes due 2028 (Caa2/CCC+) off 1 5/8 points week to date.

Mallinckrodt LLC’s 4¾% senior notes due 2023 rose about ½ point Wednesday and headed out 4½ points better month to date.

Distressed index returns improved over the prior session after softening on Monday.

Laredo softens

Laredo Petroleum’s 7¾% senior notes due July 2029 (B3/B) were quoted Wednesday down about ¼ point at 90, 91½ after trading as low as the 89½ bid range on Monday, a trader said.

The Tulsa, Okla.-based energy company sold $400 million of the bonds on July 13 at par.

Transocean lower

Vernier, Switzerland-based offshore driller Transocean’s 8% debentures due 2027 (C/CCC) fell ½ point to 70¼ bid over the session, a market source said.

The notes are up about ¼ point week to date but about 3½ points softer month to date and down about 15 points from a month ago.

AMC bonds active

AMC’s 12% second-lien senior secured notes due 2026 (Ca/C) fell 1 point to 87 bid in heavy trading activity on Wednesday, a source said.

Secondary volume totaled $21 million.

AMC’s issue remains stronger week to date after heading out Friday at 84¾ bid.

The notes added 1¼ points on Monday and 2 points on Tuesday.

The Leawood, Kan.-based movie theater chain on Monday reported stronger second-quarter revenue and lower quarterly net losses.

Endo trades down

Endo Finance LLC’s 6% senior notes due 2028 (Caa2/CCC+) fell less than ¼ point to 63 3/8 bid by the close, a source said.

The notes were trading 1 5/8 points softer week to date.

The Dublin-based pharmaceuticals maker announced a $35 million opioid-related settlement in July.

Mallinckrodt improves

Mallinckrodt’s 4¾% senior notes due 2023 rose about ½ point on Wednesday to 29 bid, a market source said.

The issue is about 4½ points higher month to date.

A confirmation hearing for the bankrupt pharmaceuticals maker’s disclosure statement is scheduled for Sept. 21-22.

Mallinckrodt filed a new joint Chapter 11 plan of reorganization and received conditional approval of its disclosure statement on June 16.

The company, based in Dublin and St. Louis, filed for Chapter 11 bankruptcy on Oct. 12, 2020 in the U.S. Bankruptcy Court for the District of Delaware.

Distressed returns higher

Distressed index returns gained on Tuesday after softening on Monday.

The S&P U.S. High Yield Corporate Distressed Bond index total return was 0.44% on Tuesday, up from minus 0.78% on Monday.

Month-to-date total returns improved to minus 0.82% on Tuesday from minus 1.26% at the week’s start.

Year-to-date total returns were better at 22.88% on Tuesday versus 22.34% on Monday.

Overall market tone was mostly positive on Wednesday with oil prices higher for a second consecutive session.

North Sea Brent crude oil futures for October deliveries settled up 81 cents at $71.44 a barrel.

West Texas intermediate crude oil benchmark futures for September deliveries fell 96 cents to $69.25 a barrel, while October deliveries added 96 cents to settle at $69.02 a barrel.

The iShares iBoxx High Yield Corporate Bond ETF rose 14 cents to $87.12 after declining 20 cents on Tuesday and 20 cents on Monday.

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