Frontier notes decline in wake of unsuccessful auction for assets; J.C. Penney issues mixed

By James McCandless

San Antonio, May 24 – As the week nears the end and a three-day weekend looms, traders reported a quiet day in the distressed debt market on Thursday.

Frontier Communications Corp. notes declined in the wake of an unsuccessful auction for its Florida assets.

J.C. Penney Co., Inc. issues were mixed as the market continues to react to the departure of its CEO following a lackluster Q1 report.

Ensco plc bonds declined for a second day after the company declared its regular quarterly dividend for common stock on Tuesday.

Intelsat SA paper fell. Recently, the company released a disappointing Q1 report. PetSmart Inc. notes were mixed. The company announced Monday the appointment of a new CEO after a nine-month search. Mallinckrodt plc issues were up in the medical space.

Frontier slides

Norwalk, Conn.-based wireline name Frontier Communications notes declined, traders confirmed, after not receiving what it considered to be satisfactory bids in an auction of its Florida assets. The company intended to use the proceeds from the sale to help pay down its debt.

“No word yet on how this will play out,” a trader said. “But they are talking to bondholders about it.”

The 7 5/8% notes due 2024 fell ½ point to close at 68 bid. The 10½% notes due 2022 lost about 1 point to close at around 90 bid. The 11% notes due 2025 shaved off about ¾ point to close at 80 bid.

On Wednesday, the 7 5/8% notes were level, the 10½% notes fell about ½ point and the 11% notes lost about ¼ point.

J.C. Penney mixed

Plano, Texas-based department store chain J.C. Penney issues were mixed, market sources confirmed, after the company announced on Tuesday that chief executive officer Marvin Ellison would be leaving the company to head up Lowe’s Cos., Inc.

Last Thursday, the company released its Q1 report, showing a 4.1% decrease in revenue year-over-year and a 22 cent loss per share.

The 7.4% bonds due 2037 rose about 1¾ points to close at around 62 bid. The 8 5/8% notes due 2025 lost 1¾ points to close at 83¾ bid.

On Wednesday, the 7.4% bonds lost about 1¾ points. The 8 5/8% notes dropped 2 points.

Ensco off

Britain-based oil and gas driller Ensco bonds fell, traders confirmed. On Tuesday, the company declared its regular quarterly dividend of 1 cent per share of common stock.

The dividend will be payable on June 15.

The 5¾% bonds due 2044 fell about 1¼ points to close at around 72 bid.

On Wednesday, the 5¾% bonds shaved off about ¼ point.

Volume names trade

Luxembourg-based satellite communications company Intelsat paper slid. A recent Q1 report showed a 56 cents per share loss, missing analyst estimates of 41 cents per share.

The Intelsat (Luxembourg) SA 7¾% paper due 2021 fell about 2¼ points to close at 81¾ bid. The 8 1/8% paper due 2023 lost about 8 points to close at around 75½ bid.

Phoenix-based pet supplies retailer PetSmart issues were mixed. On Monday, the company appointed retail executive J.K. Symancyk as its new chief executive officer.

The 5 7/8% notes due 2025 jumped up 2¼ points to close at 70¼ bid. The 8 7/8% notes due 2025 lost about 1 point to close at around 48½.

Britain based drug maker Mallinckrodt saw its 4 ¾% paper due 2023 trade up about ¼ point to close at around 80 bid.

“There was an uptick in activity with Trump and the North Korea business but it hasn’t permeated in our market yet,” a trader said. “We always lag behind the common market so look for more impact tomorrow.”

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