Hertz rebounds as company touts plan; Cobalt eyed post-earnings; Valeant gives back

By Stephanie N. Rotondo

Seattle, Aug. 9 – Fresh earnings continued to be the main driver of distressed bonds in midweek trading.

Hertz Corp., for instance, reported its latest quarterly results late Tuesday. And while the numbers missed expectations, the company’s assertions that its turnaround plan was going well seemed to appease investors. As such, a trader said the company’s bonds “rebounded late” in Wednesday’s session.

Cobalt International Energy Inc. released its second-quarter earnings late Tuesday. Come Wednesday, the oil and gas company’s convertible bonds were trading mixed.

Meanwhile, Valeant Pharmaceuticals International Inc.’s debt was “reversing from yesterday,” a trader said. The bonds had moved up in the previous session after posting better-than-expected results.

The market also reacted positively to the company’s comments regarding its plan to cut $5 billion in debt within a year. With the deadline approaching in February, management said it was on track to hit, or even surpass, that mark.

But in midweek trading, the 6 1/8% notes due 2025 were seen slipping a point to 84½.

A trader noted that the weakness in Valeant coincided with an overall softer tone for the day.

Names like California Resources Corp. and Denbury Resources Inc. followed along with the day’s downward trend, according to market sources.

At one desk, a trader said California Resources; 8% second-lien notes due 2022 declined another 1½ points to finish at 56¾, on “pretty heavy volume.”

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