Endo, Mallinckrodt higher following settlement; Wesco notes improve; Diamond Sports up

By Cristal Cody

Tupelo, Miss., Sept. 13 – Distressed pharmaceutical paper continued to improve on Monday following last week’s $50 million opioid-related settlement.

Endo International plc’s bonds saw further gains after the paper rallied over 3 points on Friday.

The company’s 6% senior notes due 2028 (Caa3/CCC+) rose ¼ point.

Mallinckrodt LLC’s paper mostly improved with the company’s 4¾% notes due 2023 up ¾ point on the day.

Wesco Aircraft Holdings Inc.’s secured notes recovered about ½ point to 1¼ points on Monday after the bonds declined about 5 points in the prior week.

In other distressed secondary volume, Diamond Sports Group LLC’s secured notes traded ½ point higher, while the unsecured paper improved about ¼ point.

Also better on Monday, AMC Entertainment Holdings, Inc.’s secured and subordinated bonds rallied about 2½ points to over 5½ points.

Endo gains

Endo Finance LLC’s 6% senior notes due 2028 (Caa3/CCC+) rose ¼ point to 67¾ by the close on Monday, a source said.

The notes traded as high as 69½ bid on Friday before finishing the session 3¼ points better at 67½ bid.

The issue is trading about 4¼ points better month to date.

Endo announced on Thursday that subsidiaries Endo Health Solutions Inc., Endo Pharmaceuticals Inc., Par Pharmaceutical, Inc. and Par Pharmaceutical Cos, Inc. settled three opioid-related cases in New York for $50 million.

The company said it is also exploring other strategic alternatives that it may implement if a global settlement cannot be reached.

Endo, a Dublin-based pharmaceuticals maker, announced in July that Endo Health and Endo Pharmaceuticals reached a $35 million opioid-related settlement in Tennessee.

That settlement followed the July 21 announcement of a state and local governments settlement of up to $26 billion with Johnson & Johnson and distributors AmerisourceBergen Drug Corp., Cardinal Health Inc. and McKesson Corp. over the opioid epidemic.

New York attorney general Letitia James announced Friday that the agreement does not release Endo from any claims by the New York Department of Financial Services or plaintiffs still suing the company within the state.

The state’s lawsuit against Mallinckrodt and Rochester Drug Cooperative are moving separately through U.S. Bankruptcy Court.

Mallinckrodt mostly up

Mallinckrodt’s 4¾% notes due 2023 were seen ¾ point higher from Friday at 40½ bid in active trading, a market source said.

The company’s 5 5/8% notes due 2023 dropped 2½ points to 63½ bid in thin secondary supply during the session.

A confirmation hearing for the bankrupt pharmaceuticals maker’s joint Chapter 11 plan of reorganization and disclosure statement is scheduled for Sept. 21-22.

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.

Wesco secureds better

Wesco Aircraft’s notes issued via Wolverine Escrow LLC clawed back some of last week’s losses in secondary trading on Monday, a source said.

Wesco’s 8½% senior secured notes due 2024 (Caa3/CCC+) improved 1¼ points from Friday to 86½ bid on $7 million of paper traded.

Wesco’s 9% senior secured notes due 2026 (Caa3/CCC+) also rose ½ point to 85½ bid on Monday.

The Fort Worth-based aerospace supplier reported weak second-quarter earnings in August.

Diamond Sports higher

Diamond Sports’ 5 3/8% senior secured notes due 2026 (B2/CCC) traded ½ point better going out at 66¼ bid during the session, a source said.

Diamond Sports’ 6 5/8% senior notes due 2027 (Caa2/CC) also improved about ¼ point in heavy trading volume to 42¾ bid.

S&P Global Ratings downgraded Diamond Sports and parent Sinclair Broadcast Group Inc. in August.

In June, Sinclair reported unsuccessful attempts to secure new funding for the Chesapeake, Va.-based sports broadcast group.

Sinclair announced in August that DISH Network Corp. dropped its broadcast and tennis TV stations.

AMC notes up

AMC’s 5¾% senior subordinated notes due 2025 (Ca/C) jumped over 5½ points on Monday to trade better than 78¾ bid on $2 million of volume, a source said.

The bonds have climbed from trading at 17¾ bid at the start of the year.

AMC’s 12% second-lien senior secured notes due 2026 (Ca/C) saw heavier secondary action with $18.25 million of notes traded during the session. The bonds were up 2½ points at 94½ bid.

The Leawood, Kan.-based movie theater chain reported stronger second-quarter revenue and fewer quarterly net losses in August.

AMC raised $1.25 billion of new equity capital during the second quarter.

Distressed returns improve

Market tone stayed mostly positive over the session.

The iShares iBoxx High Yield Corporate Bond ETF rose 22 cents to $88.05.

Crude oil prices settled higher. West Texas Intermediate crude oil benchmark futures for October deliveries rose 73 cents to $70.45 a barrel.

Distressed index returns ended Friday higher.

The S&P U.S. High Yield Corporate Distressed Bond index total return rose to 0.06% from minus 0.12% on Thursday.

Month-to-date total returns improved to 0.31% on Friday from 0.25% in the prior session.

Distressed year-to-date total returns were 27.08% on Friday, up from 27.01% the previous day.

© 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.