Nine West notes mixed on bankruptcy filing; FirstEnergy Solutions mixed after federal help seen unlikely

By James McCandless

San Antonio, April 9 – Traders reported another quiet day in distressed debt Monday, as investors cited uncertainty in equity markets as a barrier to entry.

Nine West Holdings notes were mixed as the company filed for Chapter 11 bankruptcy on Monday.

FirstEnergy Solutions Corp. issues sank after Secretary of Energy Rick Perry made comments suggesting that federal aid for at-risk plants was not likely.

California Resources Corp. paper closed up as it announced the completion of a cash and stock acquisition of working, surface and mineral interests from Chevron.

In distressed telecom, Frontier Communications Corp. notes were mixed as the company searched for buyers for certain assets. Intelsat SA issues were higher. Community Health Systems, Inc. paper was mixed. Elsewhere in energy, Talen Energy notes climbed again.

Nine West bankrupt

New York City-based shoe store chain Nine West saw its notes active and mixed after the company filed for Chapter 11 bankruptcy on Friday, a market source confirmed. Talks are ongoing for a selloff of some of the company’s assets.

“They acquired Jones Apparel a while back and those notes were really moving today,” a trader said.

The Jones Group Inc. 6 7/8% notes due 2019 jumped up about 5½ points to close at 8½ bid. The Jones Apparel Group Inc. 6 1/8% bonds due 2034 climbed 7½ points to close at 12 bid.

FirstEnergy help in doubt

FirstEnergy Solutions, a subsidiary of Akron, Ohio-based electricity producer FirstEnergy Corp., saw issues mixed after Secretary of Energy Rick Perry made comments suggesting that employing federal assistance to keep at-risk power plants open may not be the best option for fixing U.S. power markets.

At an event in West Virginia last Thursday, President Trump signaled his support for the measure.

The company, along with FirstEnergy Nuclear Operating Co., filed for bankruptcy last weekend.

“That may not be the way that we decide is the most appropriate, the most efficient way to address this,” Perry said.

The 6.05% notes due 2021 dropped a point to close at 30 bid. The 6.8% bonds due 2039 rose by about ¾ bid to close just above 30¾ bid.

Positive comments last week drove the 6.05% notes up 1¼ point and the 6.8% notes down 1 point.

California Resources up on acquisition

Los Angeles-based independent oil and gas producer California Resources notes traded up as reports confirmed that it has completed the acquisition of the remaining working, surface and mineral interests in the 47,000-acre Elk Hills field in the San Joaquin Basin of California.

The deal was paid for in $460 million in cash and 2.85 million shares of common stock. The effective date of the transaction is April 1.

The 6% paper due 2024 gained about ¼ point to close at 62 bid. The 8% paper due 2022 traded up ½ point to close at 78½ bid.

Volume names trade

Norwalk, Conn.-based wireline telecom name Frontier Communications notes were mixed to start the week as the company tried to find a buyer for certain assets as part of its ongoing work to reduce debt.

The 7 5/8% notes due 2024 jumped up about 1¾ points to close at 62¾ bid. The 10½% notes due 2022 shaved off about 1 point to close just under 87¼ bid. The 11% notes due 2025 rose ¾ point to close at 76¾ bid.

Luxembourg-based satellite communications company Intelsat saw its Intelsat Jackson SA 5½% notes due 2023 trade up 1¾ points to close at 83¾ bid. The 7¼% notes due 2020 garnered ¾ point to close at 95½ bid.

Franklin, Tenn.-based hospital operator Community Health Systems issues were mixed Monday.

The 7 1/8% notes due 2020 gained about 1½ point to close at 83¾ bid. The 6 7/8% notes due 2022 lost ¼ point to close at 58 bid.

Allentown, Pa.-based independent power producer Talen Energy saw its 6½% paper due 2025 jump up 2½ points to close at 72¼ bid, adding to the 1¾ point Friday gain.

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