GTT better on ownership disclosure; Mattel gains on global trade news

By James McCandless

San Antonio, Aug. 13 – The distressed space trended largely positive, following other markets on news that tariffs on Chinese imports have been delayed.

GTT Communications, Inc.’s notes were better after a regulatory disclosure showed that an activist investor increased his ownership in the company.

Sector peer Frontier Communications Corp.’s issues declined.

Toy maker Mattel, Inc.’s paper gained after the United States announced that it would be delaying the latest round of Chinese import tariffs.

Utility PG&E Corp.’s notes declined after late Tuesday news that it received more committed financing offers.

In oil and gas, California Resources Corp., Oasis Petroleum Inc., and SM Energy Co.’s issues improved with oil futures.

Meanwhile, Exela Technologies, Inc.’s paper continued to rise.

Pharma name Teva Pharmaceutical Industries Ltd.’s notes were under water.

GTT better, Frontier loses

GTT’s notes were seen closing better, traders said.

The 7 7/8% senior notes due 2024 picked up 3 points to close at 62½ bid.

$16 million of the notes were trading.

On Tuesday, the McLean, Va.-based cloud networking services provider’s structure was trending upward after a regulatory filing disclosed that activist investor Dan Loeb’s hedge fund had increased its stock ownership.

Third Point LLC now owns more than 3 million shares of the name, about 5.5% of outstanding shares.

“That could mean a push to improve in the near future, which might take the form of a restructure or something else transformative,” a trader said.

Last week, the company reported a loss of 2 cents per share and underwhelming revenues of $433.8 million.

Norwalk, Conn.-based wireline communications name Frontier’s issues declined.

The 10½% senior notes due 2022 dropped 1½ points to close at 50¼ bid. The 11% notes due 2025 took off 2 points to close at 47¼ bid.

Mattel gains

Toy name Mattel’s longer-term paper was seen gaining throughout the day, market sources said.

The 6.2% senior paper due 2042 jumped up 5½ points to close at 88½ bid. The 5.45% paper due 2041 added 3¼ points to close at 82¾ bid.

After news broke Tuesday that the United States would delay a new round of tariffs on Chinese imports until December, the El Segundo, Calif-based toy manufacturer saw a bounce.

Much of the company’s production facilities are in China.

The name’s structure has been under increased scrutiny over the last two years as uncertainty in the global trade climate persists and the company adapts to the shuttering of Toys “R” Us.

Also laying on the pressure is an anonymous whistleblower letter being investigated by the company, though its contents are undisclosed.

PG&E down

Electric utility PG&E’s notes spent Tuesday declining, traders said.

The 6.05% notes due 2034 slid 2¼ points to close at 112½ bid.

The notes saw $58 million on the tape at the close.

Late Monday, the San Francisco-based bankrupt electric utility announced that following an earlier proposal made by Abrams Capital Management and Knighthead Capital Management, the company has been offered substantially similar equity capital commitments from a number of financial institutions in support of its plan of reorganization, Prospect News reported.

The commitments now exceed $12 billion.

Last week, the name reported better-than-expected second-quarter earnings at $1.10 per share, though revenues were lacking at $3.943 billion.

“At some point, they are going to have to move on one of these offers,” a trader said.

Oil improves

Oil futures saw improvements, following broader market gains tied to trade news, market sources said.

Los Angeles-based independent oil and gas producer California Resources’ issues were positive.

The 8% senior notes due 2022 added 1¾ points to close at 56¾ bid.

Houston-based producer Oasis Petroleum’s paper was seen moving better.

The 6 7/8% senior paper due 2023 gained ½ point to close at 88½ bid. The 6¼% paper due 2026 tacked on 1¾ points to close at 81¾ bid.

Denver-based peer SM Energy’s notes followed the trend.

The 6 5/8% senior notes due 2027 picked up 2 points to close at 84½ bid.

West Texas Intermediate crude oil futures for September delivery rose $2.17 to settle the session at $57.10 per barrel.

North Sea Brent crude oil futures for October delivery ended the day at $61.30 per barrel after a $2.73 gain.

Exela up

Exela’s issues saw another rise in Tuesday’s activity, traders said.

The 10% senior secured notes due 2023 rose 2½ points to close at 64¾ bid.

On Monday, the notes gained 4¾ points.

The company’s notes have been heavily trading since last Thursday, when the Irving, Texas-based business software name showed a 22 cents per share loss for the second-quarter.

Teva under

In pharma, Teva’s paper spent the day under water, market sources said.

The 2.8% senior paper due 2023 moved down 2 points to close at 83½ bid. The 3.15% paper due 2026 lost 2 points to close at 73¼ bid.

The Petach Tikva, Israel-based generic pharmaceuticals manufacturer’s paper has been languishing in distressed territory as the industry grapples with increasing legal challenges.

The company has paid two settlements in recent weeks and earmarked a multimillion-dollar fund for potential future legal proceedings.

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