Fourth quarter announcements make active day for Intelsat; Sears stays busy post-Nordstrom news

San Antonio, Feb. 26 – Traders reported yet another slow day for the distressed debt market to start the week, while much of the volume was filled by fourth quarter announcements.

Notes in California Resources Corp., a favorite in the distressed energy sector, saw some movement as fourth quarter numbers and end of year results were released at the market’s close.

Perennial high volume favorite Intelsat SA saw its issues heavily trade again after fourth quarter results were released Monday morning.

Sears Holdings, Inc. saw a second day of activity. The paper started trading in higher volume after Friday reports that Nordstrom, Inc. would convert to a private entity.

Frontier Communications Corp. took up more volume in the telecom space. Mallinckrodt plc and Community Health Systems, Inc. dominated the healthcare sector as Revlon, Inc. continued to be a high volume name in retail.

California Resources notes mixed

Notes in Los Angeles-based independent oil and gas producer California Resources were mixed on the day, as a market source said that traders were unsure about whether or not the company’s fourth quarter numbers would be strong enough. At market close, the company reported a net loss of $266 million.

“I would wait and see how people react to that tomorrow,” a trader said.

The 6% notes due 2024 fell almost 3 points to close at about 63 bid. The 8% notes due 2022 rose almost 2 points to close at about 82 bid.

Intelsat issues jump

Luxembourg-based satellite communications company Intelsat’s issues climbed Monday, as reports confirmed a loss of $90 million loss for the fourth quarter and a $178.7 million loss for 2017. The fourth quarter loss, reported at 75 cents per share was higher than the 25 cents per share that analysts had predicted.

The Intelsat Jackson SA 5½% issues due 2023 jumped up about 2 points to close at 81 bid. The 7¼% issues due 2020 traded up almost 2 points to close around 90½ bid. The Intelsat (Luxembourg) SA 8 1/8% issues due 2023 rose about 1½ points to close at 46¾ bid.

Sears paper active

After Friday reports confirmed that Seattle-based upscale retailer Nordstrom would be converting from a publicly traded company to private, several distressed retailers including Hoffman Estates, Ill.-based department store chain Sears paper increased in activity. Market sources confirmed that this activity has carried over for Sears for a second day.

The 6 5/8% paper due 2018 fell almost 3 points to close near 77 bid. The 8% paper due 2019 lost about 1 point to close at 46 bid.

Volume names trade

Norwalk, Conn.-based wireline telecom name Frontier Communications remained active as ever in the distressed telecom space, a market source confirmed. The company has had its notes in high volume since announcing positive changes to their credit agreements, allowing for more flexible debt service.

The 7 5/8% notes due 2024 lost about ½ point to close at 61½ bid. The 10½% notes due 2022 rose about 1¼ point to close above 84¾ bid. The 11% notes due 2025 rose 1 point to close at 77¾ bid.

Issues in Britain-based drug maker Mallinckrodt have been in consistent high volume since completing the $1.2 billion acquisition of Rockville, Md.-based medical applications name Sucampo Pharmaceuticals.

The 4¾% issues due 2023 ticked up over ½ point to close above 78 bid.

Franklin, Tenn.-based hospital operator Community Health Systems staked out its usual space in high volume.

The 7 1/8% issues due 2020 edged up slightly to close at about 86¼ bid. The 6 7/8% issues due 2022 rose about ¼ point to close at about 69¼ bid.

Paper in New York City-based cosmetics producer Revlon was active again to start the week. The company has been heavily traded since announcing the departure of chief executive officer Fabian Garcia after failing to reverse revenue losses.

The 5¾% paper due 2021 rose about a point to close near 81½ bid. The 6¼% paper due 2024 shaved off ½ point to close at 69 bid.

“This was a terrible start to the week,” a trader said. “There isn’t much to work with on such low volume. We may be in for another bad week.”

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