Murray Energy notes improve as restructure wraps up; American Tire issues lose in distribution deal fallout

By James McCandless

San Antonio, July 3 – Trading was steady in the distressed debt market on Tuesday but was cut short by the early close for the Fourth of July holiday.

Murray Energy Corp. notes gained after the company announced that it had completed its debt restructuring.

American Tire Distributors issues declined in the fallout after Bridgestone withdrew from its passenger tire distribution deal with the company last week.

Community Health Systems, Inc. paper was mixed. Last week a subsidiary brought a $1.3 billion offering to market.

Frontier Communications Corp. notes were mixed. Recently, the company announced that its chief financial officer would be resigning.

Intelsat SA issues improved. The company will be buying back its 7¾% notes due 2021.

Mallinckrodt plc paper declined in the medical space.

Murray rises

St. Clairsville, Ohio-based coal producer Murray Energy notes improved, traders confirmed, after the company announced that it had completed its debt restructuring. It has exchanged 71% of its 11¼% senior secured notes due 2021 and 97% of its term loans.

The company issued $495.4 million of new notes and also entered into an amended and restated asset-based lending credit agreement that includes a $135 million revolver and a $90 million last-out term loan, both due in 2021 (see related story elsewhere in this issue).

The company is currently awaiting a decision from the Department of Energy on whether it will provide financial assistance to at-risk coal and nuclear power plants.

“Whatever happens, they’re in a better position than they were a few days ago,” a trader said.

The 11¼% notes due 2021 gained about ¾ point to close at 59¾ bid.

On Monday, the 11¼% notes lost about ¼ point.

American Tire drops

Huntersville, N.C.-based tire distributor American Tire issues saw more losses Tuesday, market sources confirmed. Last Thursday, Bridgestone announced that it would end its passenger tire distribution deal with the company, adding to the decline brought on when Goodyear announced earlier this year that it would also end its distribution deal.

The 10¼% notes due 2022 shaved off 2 points to close at 25½ bid.

On Monday, the 10¼% notes rose 4½ points.

Community Health mixed

Franklin, Tenn.-based hospital operator Community Health Systems paper was mixed, traders confirmed. Last Thursday, subsidiary CHS/Community Health Systems, Inc. brought a $1.03 billion offering of 8 5/8% senior secured notes due 2024 to market after announcing the deal on Wednesday.

The company announced last Tuesday that it had entered into a definitive agreement to sell one of its Oklahoma hospitals to a subsidiary of Oklahoma-City based hospital facilities operator INTEGRIS Health.

The 7 1/8% paper due 2020 lost about 1 point to close at around 91 bid. The 6 7/8% paper due 2022 picked up about ¼ point to close at around 48¾ bid.

On Monday, the 7 1/8% paper rose 1 point and the 6 7/8% paper lost about 3¾ points.

Volume names trade

Norwalk, Conn.-based wireline name Frontier Communications notes were mixed. Recently, the company announced the impending resignation of CFO Perley McBride.

The 7 5/8% notes due 2024 lost about 1¼ points to close at around 67½ bid. The 10½% notes due 2022 fell about 1½ points to close at around 89½ bid. The 11% notes due 2025 rose about ¼ point to close at around 79½ bid.

On Monday, the 7 5/8% notes dropped about 1 point, the 10½% notes rose about ¼ point and the 11% notes shaved off about ¾ point.

Luxembourg-based satellite communications company Intelsat issues were also mixed. Recently, the company announced that it would buy back its Intelsat (Luxembourg) SA 7¾% senior notes due 2021.

The 7¾% notes due 2021 rose about ¼ point to close at around 92¾ bid. The 8 1/8% notes due 2023 traded up 1 point to close at 82 bid.

On Monday, the 7¾% notes lost about 2½ points and the 8 1/8% notes gained ¼ point.

Britain-based drug maker Mallinckrodt saw its fell about 1 point to close at around 83 bid.

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