L Brands lower on earnings anticipation; Endo International notes continue to rise

By James McCandless

San Antonio, Aug. 21 – Trading in the distressed debt market on Wednesday focused on many of the names recently in play.

L Brands, Inc.’s notes traded lower in anticipation of the company’s release of its second-quarter earnings report.

Sector peer J.C. Penney Co., Inc.’s issues moved in varied directions.

Meanwhile, pharma name Endo International plc’s paper continued to rise off of Tuesday’s news that it had reached a settlement in opioid lawsuits.

Generics producer Teva Pharmaceutical Industries Ltd.’s notes were also positive.

Oil futures diverged, mirrored by Whiting Petroleum Corp.’s issues as Valaris plc and Diamond Offshore Drilling, Inc.’s paper improved.

Utilities name PG&E Corp.’s notes saw a partial recovery of the last few day’s losses.

Chemicals producer Chemours Co.’s issues dipped, snapping a four-day positive run.

L Brands down

Retailer L Brands’ notes were moving lower on Wednesday, traders said.

The 6¾% senior notes due 2036 dipped ½ point to close at 87 bid. The 5¼% notes due 2028 lost ¼ point to close at 91¾ bid.

The Columbus, Ohio-based retailer’s capital structure was active on Wednesday in anticipation of the company’s second-quarter earnings report.

“There isn’t much good expected here,” a trader said before the report was issued. “The retail space is still weak but it’s not the main distressed target right now.”

After the close, the company released its report and cut its guidance for the third quarter.

Earnings were pegged at a 24 cents per share profit, above analyst predictions of a 19 cents per share profit.

Sales were $2.9 billion for the quarter, lower than sales this time the previous year.

Plano, Tex.-based sector peer J.C. Penney’s issues varied.

The 5 7/8% senior secured notes due 2023 garnered ½ point to close at 83¾ bid. The 8 5/8% notes due 2025 fell ½ point to close at 49 bid.

Endo, Teva improve

Meanwhile, Endo’s paper continued to rise, market sources said. The 6% senior paper due 2023 improved by ¼ point to close at 67½ bid.

The Par Pharmaceutical Inc. 7½% senior secured paper due 2027 garnered 1 point to close at 95½ bid.

The 6% paper jumped up 5¾ points on Tuesday.

News broke on Tuesday that the Dublin-based generic drug producer had reached a settlement with two Ohio counties in lawsuits stemming from the opioid epidemic.

The company agreed to pay a total of $10 million to the entities and give an additional $1 million in medications.

As part of the settlement, the company and its subsidiaries will not admit to wrongdoing, fault or liability of any kind.

Petach Tikva, Israel-based sector peer Teva’s notes were also positive.

The 2.8% senior notes due 2023 gained 2 points to close at 85 bid. The 3.15% notes due 2026 added 1¾ points to close at 75½ bid.

Oil names mixed

As oil futures diverged, distressed energy tranches trended upward, traders said.

Denver-based independent oil and gas producer Whiting’s debt tranches saw mixed movements.

The 6¼% senior notes due 2023 slipped 1 point to close at 81½ bid. The 6 5/8% notes due 2026 gained 2½ points to close at 77¼ bid.

London-based contract driller Valaris’ paper moved up.

The 5.2% senior notes due 2025 gained 3 points to close at 60½ bid. The 7¾% paper due 2026 tacked on 4 points to close at 62½ bid.

Houston-based driller Diamond Offshore’s notes followed the positive trend.

The 3.45% senior notes due 2023 rose 1¼ points to close at 84 bid. The 4 7/8% senior notes due shot up 3½ bid.

Oil futures saw diverging movements.

West Texas Intermediate crude oil futures for October delivery shaved off 45 cents to settle at $55.68 per barrel.

North Sea Brent crude oil futures for October delivery ended the session at $60.30 per barrel after a 27 cent pickup.

PG&E up

Elsewhere, utilities name PG&E’s issues saw a partial recovery, market sources said.

The 6.05% notes due 2034 gained 1½ points to close at 110 bid.

Over the last two trading days, the notes dropped 2¾ points.

The San Francisco-based bankrupt electric utility’s structure saw negative attention in reaction to a bankruptcy judge allowing wildfire victim lawsuits to proceed in court.

The development exposed the name to an additional $18 billion in liabilities.

Chemours dips

Chemicals name Chemours’ paper was seen dipping, traders said.

The 5 3/8% senior paper due 2027 lost ½ point to close at 88 bid.

The Wilmington, Del.-based chemicals producer’s paper snapped a four-day positive run.

On Tuesday, the company received a few conflicting ratings changes.

An analyst at Susquehanna upgraded the company to positive from neutral while S&P Global Ratings revised its outlook to negative from stable.

© 2015 Prospect News.
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