Ocwen rebounds after Thursday plunge; California Resources continues to tick down; Valeant falls

By Colin Hanner

Chicago, April 21 – The last trading day of the week saw a resurgence for Ocwen Financial Corp. in the distressed debt market, which a trader said was a recalibration of an issue whose 18-point decline on Thursday was “overdone.”

The Atlanta-based residential and commercial mortgage provider saw a several-point swing in the opposite direction on Friday, a day following a lawsuit brought forward by the Consumer Financial Protection Bureau.

Ocwen disputes the tenets of the lawsuit.

The price of crude oil slipped under $50 per barrel, dragging distressed California Resources Corp. down as well. Data released by the Energy Information Agency showed oil stockpiles in the U.S. continued to increase as other global players are shifting toward extending supply cuts into the second half of the year.

Elsewhere, Valeant Pharmaceuticals International, Inc. was down on the session, capping off a week off mostly declining issues.

iHeartCommunications, Inc., which was active for most of the week, saw sudden downturn in activity on the same day Reuters reported a group of iHeartMedia, Inc. lenders agreed to oppose the exchange offer aimed at avoiding bankruptcy, which ended on Friday.

And one of Intelsat SA’s subsidiaries was down on the same session the company decided to extend exchange offers for several sets of its notes.

Ocwen rebounds

Ocwen Financial’s 8 3/8% notes due 2022 were up 4 points to 89½, a market source said. Those same notes were down 18 points on Thursday and touched as low as 82 during intraday trading.

“The news was not good, but it looks like they were a bit overdone,” a trader said.

The Consumer Financial Protection Bureau cites inaccurate statements, payments and faulty management of its escrow accounts, Bloomberg reported.

The agency added that it brought forward the lawsuit because Ocwen announced it had conducted “years of systemic and significant errors throughout the mortgage servicing process, which cost some of them their homes,” according to a news release.

Oil down

As crude oil future prices continued to leak, capping one of the worst week stretches in more than a month, so did some distressed exploration and production companies.

West Texas Intermediate delivery fell $1.09, or 2.2%, to $49.62.

California Resources’ 8% notes due 2022 were down 1 point to 75½, a trader said. A market source quoted the notes with a 76 bid, 76¾ offer, nearly unchanged from Thursday’s levels.

And Plano, Texas-based Denbury Resources Inc.’s 6 3/8% notes due 2021 were down ½ point to 80½, a market source said.

iHeart news, but no moves

A private offer set to expire Friday evening will be opposed by iHeartMedia lenders, Reuters reported on Friday afternoon.

iHeartCommunications extended the private offers to lenders for its term loan D and term loan E facilities to amend or exchange them for new securities of iHeartMedia, Inc. and CC Outdoor Holdings, Inc to Friday at 5 p.m. ET from April 14.

Yet, iHeartCommunications did not suffer quite the backlash expected. The 14% notes due 2021 saw one trader and were down ¾ point to 30, a trader said.

Valeant down

Though the Candian drugmaker priced the least expensive Brodalumab drug on the market on Friday, according to the company, its bonds, or its stock for that matter, were not reflective of the news.

Valeant’s 7 7/8% notes due 2025 were down 7/8 point to 72 7/8, a trader said.

The 5 7/8% notes due 2023 were down ¼ point to 73½.

The 6¾% notes due 2018 were unchanged at par-and-a-1/8.

In the hospital sector, Community Health Systems, Inc.’s 6 1/8% notes due 2025 were up 5/8 point to 82 5/8.

Distressed wrap-up

Global offshore shipper Navios Maritime Holdings Inc.’s 8 1/8 due 2019 were unchanged at 89 3/8.

Hertz Global Holdings Inc.’s 5½% notes due 2024 were up a “little over ¼ point” to 87¼, a trader said.

Intelsat Jackson Holdings SA’s 5½% notes due 2023 were down ¼ point to 84½. On Friday, the Luxembourg-based communications satellite company extended exchange offers to May 10 from April 20 due to low participation rates, which includes the 5½% notes due 2023.

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