American Tire notes level; Community Health issues mixed following pricing of offering

By James McCandless

San Antonio, July 5 – The distressed debt market, back from the Fourth of July holiday, saw volume within popular names but subdued everywhere else on Thursday.

American Tire Distributors notes were level. Recently, Bridgestone announced that it would be ending its passenger tire distribution deal with the company.

Community Health Systems, Inc. issues were mixed. A subsidiary recently brought a $1.3 billion offering to market.

PetSmart, Inc. paper was mixed. The company is currently embroiled in a dispute with its creditors.

Frontier Communications Corp. notes were mixed. The company recently announced the resignation of its chief financial officer.

Intelsat SA issues were mixed. The company is preparing to buy back its 7¾% notes due 2021.

In the medical space, Mallinckrodt plc paper improved.

American Tire level

Huntersville, N.C.-based tire distributor American Tire notes were mixed, traders confirmed. Last Thursday, Bridgestone announced that it would end its passenger tire distribution deal with the company. A significant portion of its business has already been negatively affected after Goodyear announced that it would end its distribution deal.

“They’re in the middle of shifting to digital-focused operations,” a trader said. “Who knows how much business that could recoup, but it won’t be 100% of it.”

The 10¼% notes due 2022 were level at 25½ bid.

On Tuesday, the 10¼% notes gained 4½ points.

Community Health mixed

Franklin, Tenn.-based hospital operator Community Health Systems issues were mixed, market sources confirmed. Recently, subsidiary CHS/Community Health Systems, Inc. brought a $1.03 billion offering of 8 5/8% senior secured notes due 2024 to market.

The company also announced recently 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% notes due 2020 were level at around 91 bid. The 6 7/8% notes due 2022 gained about ¾ point to close at 49½ bid.

On Tuesday, the 7 1/8% notes lost about 1 point and the 6 7/8% notes rose about ¼ point.

PetSmart mixed

Phoenix-based pet supplies retailer PetSmart paper was mixed, traders confirmed. Last Wednesday, the company filed a lawsuit against Citigroup for allegedly breaching contract as its loan agent by not cooperating with a recent equity transfer of 36.5% of e-commerce segment Chewy.com. The suit is the latest in a series of actions between the company and its creditors in an escalating dispute over the transfer.

The 5 7/8% paper due 2025 rose about 1 point to close at 78 bid. The 8 7/8% paper due 2025 shaved off ¼ point to close at 66½ bid.

Volume names trade

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

The 7 5/8% notes due 2024 rose about ¼ point to close at around 67¾ bid. The 10½% notes due 2022 were level at around 89½ bid. The 11% notes due 2025 dropped about 1 point to close at 79¾ bid.

On Tuesday, the 7 5/8% notes lost about 1¼ points, the 10½% notes lost about 1½ points and the 11% notes gained about ¼ point.

Luxembourg-based satellite communications company Intelsat issues were also mixed in distressed telecom. Recently, the company announced a buyback program for its Intelsat (Luxembourg) SA 7¾% senior notes due 2021.

The 7¾% notes due 2021 gained about 2¼ points to close at 95 bid. The 8 1/8% notes due 2023 lost about ½ point to close at around 81½ bid.

On Tuesday, the 7¾% notes rose about ¼ point and the 8 1/8% notes gained 1 point.

Britain-based drug maker Mallinckrodt saw its 4¾% paper due 2023 rise about ¾ point to close at around 83¾ bid.

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