Altice up on debt-cutting plans; energy names off as crude retreat continues; Murray drops as Bowie buyout dies

By Paul Deckelman

New York, Nov 15 – Traders in distressed debt and in the bonds of other underperforming companies and sectors saw yet another mostly lower session on Wednesday, mirroring continued weakness in the broader high yield bond arena.

Energy issues such as California Resources Corp. continued to retreat, in line with yet another downturn in crude oil prices.

Coal miner Murray Energy Corp.’s paper fell sharply on the news that sector peer Bowie Resources Partners LLC had canceled a deal that would have let Murray and other investors acquire Bowie.

On the upside, however, the various bonds of global telecommunications company Altice moved higher, after the cable, broadband and phone service provider said that it would shift its focus from acquisitions to easing its estimated €50 billion net debt load.

Recently embattled U.S. telecom operator Frontier Communications Corp.’s paper moved up in active dealings, as did sector peer CenturyLink, Inc.

In the convertibles market, Acorda Therapeutics Inc.’s notes fell sharply, in line with a plunge in the biotechnology company’s shares, on the news that it will halt clinical trials on a Parkinson’s disease drug that it is testing due to several patient deaths during those tests.

Energy issues off again

It was another downside day in the energy patch, led by California Resources’ benchmark 8% notes due 2022.

“They were really active today,” he said of the Los Angeles-based E&P company’s notes, pegging the issue down ¾ point at 69½ bid – well down from recent levels as high as the 75 bid mark.

Over $48 million traded, the busiest issue in Junkbondland.

Calgary, Alta.-based MEG Energy Corp.’s 7% notes due 2024 were down a deuce on the day at 87 bid, on top of Tuesday’s 1¼ -point downturn.

Those credits fell in line with a continued slide in world crude oil prices.

December-contract West Texas Intermediate was down for a second day in a row, losing 37 cents per barrel to settle at $55.33 on Wednesday, after plunging by $1.06 per barrel Tuesday on the New York Mercantile Exchange.

North Sea Brent for January delivery likewise retreated by 34 cents per barrel in Wednesday London futures trading, its fourth consecutive loss, closing at $61.87; on Tuesday, it had slid by 95 cents per barrel.

Murray mauled as Bowie deal pulled

Murray Energy’s 11¼% notes due 2021 issue was the big loser on the day, plunging by more than 7 points to 45 ¾ bid, after having traded around 53 on Monday.

More than $36 million was traded.

St. Clairsville, Ohio-based coal miner Murray’s bonds were battered after sector peer Bowie Resource Partners announced that it was cancelling a deal that would have had Murray and other investors take over Louisville, Ky.-based Bowie.

Murray would have gotten a 30% stake in Bowie, which was to have been renamed Canyon Consolidated Resources.

Bowie last week was heard by high-yield syndicate sources to have withdrawn a planned $510 million junk bond offering that would have financed the takeover, including refinancing Bowie’s existing debt.

Altice up on debt pledge

A trader noted that Netherlands-based Altice’s various bonds were better on the day, after company executives vowed on their third-quarter conference call to shelve the aggressive acquisition strategy which had built the telecom operator into one of the world’s largest players in that sector, and to instead focus on reducing its estimated €50 billion equivalent ($59 billion) net debt load.

Its Altice FINCO SA 7 5/8% notes due 2025 were ½ point better on the day at 97½ bid, with over $42 million having traded.

Its Altice SA 7¾% notes due 2022 gained 1 full point to end at 102 bid, on volume of over $31 million.

Altice Financing SA’s 6 5/8% notes due 2023 also ended at 102 bid, up ¾ point, with over $23 million having changed hands.

The Altice US Finance I Corp. 5½% notes due 2026 bucked the mostly positive trend, losing ¼ point to close at 101½ bid, on $20 million of volume.

Bonds of Altice subsidiary Numericable-SFR SA also were pushed upwards on the parent company’s news, with the SFR 7 3/8% notes due 2026 up more than 1¼ point at 104¼ bid, with over $35 million traded.

Frontier firms up

Among domestic telecom operators, a trader said that Frontier Communications “did a little better, considering the fact that they had been getting hammered just about every day.”

He quoted the Stamford, Conn.-based company’s issues better by ½ to ¾ point, with its 10½% notes due 2022 up 5/16 point at just over 75½ bid, while its 11% notes due 2022 gained ¾ point to close at 76 bid, on volumes of $28 million and $23 million, respectively.

Monroe, La.-based sector peer CenturyLink’s 7 ½% notes due 2024 firmed by ¼ point to 96 7/8 bid.

Acorda convertibles crushed

In the convertibles market, Acorda Therapeutics’s 1.75% notes due 2021 tanked alongside the company’s stock as investors responded to headlines about the Ardsley, N.Y.-based biotechnology company’s Parkinson’s disease drug.

Acorda announced on Wednesday that it would halt testing of the drug tozadenant due to five patient deaths during clinical trials.

The notes were actively traded as they plunged 13 points from Tuesday’s closing price. Those convertibles closed Wednesday’s session at 80.5, according to Trace data.

Acorda’s Nasdaq-traded shares closed the day at $17.00, a plunge of some of 39.72%.

Abigail W. Adams contributed to this review

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