FirstEnergy Solutions notes mixed as it disputes study; American Tire dips, but vows to develop new business

By James McCandless

San Antonio, April 30 – Traders reported a slow day in the distressed debt market indicative of the last day of the month.

FirstEnergy Solutions Corp. notes were mixed as the company disputed a study from a regional transmission organization that claimed that closing at-risk plants would not hurt the regional power grid.

American Tire Distributors issues were sent back down after a roller coaster week predicated on Goodyear severing its relationship with the company.

Ensco plc paper was heavily traded but level after the company posted its Q1 report last week, missing earnings and revenue targets.

Intelsat SA notes were down. A subsidiary was recently made a part of a government project. Frontier Communications Corp. issues were mixed as the company’s search for a buyer for certain assets continues. Mallinckrodt plc paper declined in the healthcare space.

FirstEnergy Solutions mixed

FirstEnergy Solutions, a subsidiary of Akron, Ohio-based electricity producer FirstEnergy Corp., saw notes mixed after reports confirmed that the company disputed the findings of a reliability study from PJM Interconnection, a regional transmission organization, over whether the planned closure of three of the company’s at-risk plants in Ohio and Pennsylvania would affect the reliability of the regional transmission system.

The study found that no adverse effects would be felt from the closures, but that steps would need to be taken in order to ensure that other sources of power do not overload as a result. President of FES Generation Cos. and chief nuclear officer Don Moul issued a statement outlining the company’s issue with the study.

“PJM did not provide a dollar estimate for the upgrades its system will need to cope with the loss of our units, but those remediation costs will be passed along to Ohio and Pennsylvania consumers in the form of higher electricity bills,” Moul said.

The company is still seeking federal assistance to keep the plants open.

The 6.05% notes due 2021 felt downward pressure but remained level at 47 bid. The 6.8% bonds due 2039 lost about 1 point to close at 46 bid. The 6.85% bonds due 2034 rose ¼ point to close at 47¼ bid.

On Friday, the 6.05% notes gained about 1 point, the 6.8% bonds lost about 1½ points, and the 6.85% bonds shaved off ½ point.

American Tire down

Huntersville, N.C.-based tire distributor American Tire issues fell slightly, market sources confirmed, after a week of lows that began after Goodyear announced last week that it would be cutting ties with the company to enter a joint distribution deal with Bridgestone.

The 10¼% notes due 2022 lost about ½ point to close at around 54 bid.

The 10¼% notes gained about 2 points Friday.

Ensco popular but level

Britain-based oil driller Ensco paper was in high volume but ended the day level, a trader confirmed. Last Friday the notes saw a decline after the company posted a loss of 25 cents per share of common stock and revenue was $417 million, both below analyst estimates.

The 5¾% bonds due 2044 remained level at 69½ bid.

On Friday, the 5¾% bonds fell ½ point.

Volume names trade

Luxembourg-based satellite communications company Intelsat notes fell. A subsidiary of the company was recently selected to participate in a satellite payload project for the Federal Aviation Administration.

The Intelsat Jackson SA 5½% notes due 2023 shaved off about ¼ point to close at around 83¾ bid. The 7¼% notes due 2020 lost ¼ point to close at 97½ bid.

Norwalk, Conn.-based wireline telecom name Frontier Communications issues were mixed as the search for buyers for certain assets continues.

The 7 5/8% notes due 2024 remained level at 65¾ bid. The 10½% notes due 2022 lost about ¼ point to close at around 88¼ bid. The 11% notes due 2025 dropped about ¾ point to close at around 76¾ bid.

Britain-based drug maker Mallinckrodt saw its 4¾% paper due 2023 lose about ¼ point to close at 73¼ bid.

“The last day of the month is usually dead,” a trader said. “Activity will probably pick up tomorrow, especially since earnings season isn’t quite done yet.”

© 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.