Valeant mixed, less active; Cengage down on earnings, Talen up; Intelsat mixed on extension

By Colin Hanner

Chicago, May 11 – There was a setback in volume for Valeant Pharmaceuticals International, Inc. in the distressed debt market on Thursday, market sources said.

For the past two sessions, it has been up by several points each day, though movement was mixed for the Canadian pharmaceutical maker.

Educational content, technology and services company Cengage Learning Inc. was remarkably lower following its first quarter earnings, though those figures remained private.

The same went for Talen Energy Corp., which was higher on the session following Wednesday’s earnings release.

Intelsat SA was mixed in some of its issues following an extension of an exchange offer due to a lower turnout rate.

Concordia International Corp. continued to move higher post-Thursday earnings, though the gains were fractional compared to a day prior.

In the exploration and production sphere, crude oil futures continued to rise on Wednesday’s rally, and distressed names California Resources Corp. and Denbury Resources Inc. followed suit.

And Neiman Marcus Group Inc. was slightly lower, though its movement could not be concretely tied to downtrodden earnings from Macy’s Inc.

Valeant mixed, Concordia higher

The contagion from Tuesday’s earnings release continued for Valeant on Thursday, but was muted compared to the previous two sessions.

“There was some movement but no real volume,” a trader said.

Its 6 1/8% notes due 2025 were unchanged at 79 7/8.

The 5 3/8% notes due 2020 were down ½ point to 93, while its 6 1/8% notes due 2023 were down ¼ point to 94 1/8.

And the 7½% notes due 2021 were up ¼ point to 91¼.

In a related sector, Endo International plc’s 5 3/8% notes due 2023 were up 2 points to 89, a market source said.

Concordia International continued to gain after its earnings, particularly in its 9% notes due 2022, which were up ¼ point to 74¼.

Its 7% notes due 2023 were up ½ point to 23½.

Cengage off

Though its earnings were private, Cengage Learning was expected to have worse-than-expected earnings on Thursday, as reflected in its distressed bond’s movement.

Its 9½% notes due 2024 were down 5 points to the “mid-80s,” a trader said, adding volume was “certainly a lot more than normal.”

Talen higher

Also in the concealed earnings situation, Talen Energy built on gains it had made before earnings on Wednesday in its 9½% notes due 2022, which were up 2½ points to 89¾, a trader said.

In a related sphere, NRG Energy subsidiary GenOn Energy Inc.’s 9 7/8% notes due 2020 were up 2¾ points to 65¾, a trader said.

Intelsat mixed on extension

Intelsat gave another update on its exchange and extended the offers until 5 p.m. ET on May 15 from midnight ET on May 10.

Meanwhile, the withdrawal deadline was extended until 4:59 p.m. ET on May 15 from 11:59 p.m. ET on May 10, according to a company notice on Thursday.

That caused some mixed movement for its subsidiaries on the session.

Intelsat Jackson Holdings SA’s 5½% notes due 2023 were up 3 points to 85, a trader said.

And Intelsat Jackson Holdings SA’s 7¾% notes due 2021 were down ¼ point to 53¼, while its 8 1/8% notes due 2023 were unchanged at 53.

Though some of the gains came off the heels of the extension, movement in the bonds picked up mid-afternoon even though the extension was announced in the early morning, a trader said.

The trader speculated that perhaps a buyer came into the mix on the hopes of a new exchange deal.

E&P gains

After Wednesday’s crude oil rally, there was still upward movement as the price per barrel neared closer to a $50 benchmark.

Distressed names followed the positive news of the sector.

California Resources’ 8% notes due 2022 were up “almost 1” point to 77, a trader said.

Denbury Resources’ 4 5/8% notes due 2023 were up 2¼ points to 67¾.

And MEG Energy Corp.’s 7% notes due 2024 were up 1 point to 86¾, a market source said.

Retail calm

Though Macy’s reported figures that supports the further breakdown of the traditional retail space, distressed retailer, Neiman Marcus in specific, did not seem to respond.

Neiman’s 8% notes due 2021 were down “a little bit” to 56½, a trader said.

“All brands did not have a big reaction to it,” the trader said. “The lack of trading in general probably caused a muted response, not that it means it was unchanged on the day.”

Distressed roundoff

Media and entertainment company iHeartCommunications, Inc.’s 9% notes due 2022 were up 1 point to 73¾.

Susanna Moon contributed to this review

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