Whiting Petroleum notes down following earnings release; Frontier paper trades mixed

By James McCandless

San Antonio, Nov. 6 – Bonds in the energy and telecom space were active on Wednesday amid a continued flow of third-quarter earnings releases.

Whiting Petroleum Corp.’s notes were moving down after posting a wider-than-expected loss for the third quarter.

Sector peer Oasis Petroleum Inc.’s issues were also under pressure upon the release of underperforming earnings.

As Chesapeake Energy Corp.’s paper followed oil futures lower, McDermott International, Inc.’s notes improved.

Meanwhile, in telecom, Frontier Communications Corp.’s issues varied after the company put out earnings and drew down the remaining balance of its revolver.

Satellite operator Intelsat SA’s paper declined during the session.

In the chemicals space, Venator Materials plc’s notes received a boost after beating earnings predictions.

Chemours Co., another chemicals producer, saw its issues in high activity but ended unchanged.

Pharmaceuticals name Mallinckrodt plc’s paper diverged.

Whiting down

Whiting Petroleum’s notes spent the day moving down, traders said.

The 6¼% senior notes due 2023 dropped 4½ points to close at 73 bid. The 6 5/8% senior notes due 2026 lost 4¼ points to close at 66¼ bid.

After the close on Tuesday, the Denver-based independent oil and gas producer posted a wider-than-expected loss for the third quarter.

The company showed a loss per share of 38 cents, higher than the 8 cents per share loss that was expected by analysts.

Revenues missed expectations at $375.89 million.

“All of these companies are feeling the consequences of low energy prices,” a trader said. “We are nearing the part of the cycle where the weaker names start to file.”

Oasis off

Sector peer Oasis Petroleum’s issues were also under pressure, market sources said.

The 6¼% senior notes due 2026 shaved off ¾ point to close at 72¾ bid. The 6 7/8% senior notes due 2023 slid 2 points to close at 87¾ bid.

The Houston-based oil and gas producer added to the bevy of names releasing earnings reports this week.

The company said that it ended the third quarter with a loss of 5 cents per share, missing analyst predictions of a 1 cent per share miss.

Revenues were better than expected at $482.74 million.

Futures dip

Distressed energy names moved in different directions as oil futures saw lower levels, traders said.

Futures shifted downward after the U.S. reported an 8 million barrel uptick in crude supplies.

West Texas Intermediate crude oil futures for December delivery fell 88 cents to settle Wednesday at $56.35 per barrel.

North Sea Brent crude oil futures for January delivery finished at $61.74 per barrel after a $1.22 loss.

Oklahoma City-based peer Chesapeake Energy’s paper trailed.

The 8% senior notes due 2025 dived 8¼ points to close at 55¾ bid. The 8% senior paper due 2027 crashed 7 points to close at 53¼ bid.

The company said on Tuesday that if energy prices remain at current levels, doubt will persist over its ability to operate as a going concern.

Houston-based oil and gas engineering name McDermott’s notes improved.

The 10 5/8% senior notes due 2024 gained 1¼ points to close at 13 bid.

Frontier, Intelsat active

Meanwhile, in the telecom space, Frontier’s issues varied in direction, market sources said.

The 10½% senior notes due 2022 slipped ¼ point to close at 46 bid. The 11% senior notes due 2025 picked up ¼ point to close at 45¾ bid.

Late in the day on Tuesday, the Norwalk, Conn.-based wireline communications name saw a lukewarm earnings report.

For the third-quarter, the company reported a 15 cents per share loss, above the expected loss of 47 cents per share.

Revenues fell short of estimates at $1.997 million.

Concurrently, the company saw negativity from the market after it announced that it had drawn down the remaining $499 million from its $850 million revolver.

“When that happens, usually some kind of restructuring follows,” a trader said. “For Frontier, it’s a long time coming.”

Frontier is holding talks with creditors over how to rework its $17 billion debt load.

Luxembourg-based satellite operator Intelsat’s paper declined.

Intelsat Jackson Holdings SA’s 5½% senior notes due 2023 lost ½ point to close at 93½ bid. Intelsat (Luxembourg) SA’s 8 1/8% senior paper due 2023 fell 1 point to close at 84½ bid.

Venator up, Chemours flat

In the chemicals space, Venator’s notes received a positive boost, traders said.

The 5¾% senior notes due 2025 jumped up 5¼ points to close at 86½ bid.

On Wednesday morning, the Stockton-on-Tees, England-based chemicals producer’s structure was lifted by news of positive third-quarter earnings.

The report showed a profit of 8 cents per share, better than the expected 3 cents per share profit.

Its $526 million in revenues also outpaced expectations.

Wilmington, Del.-based peer Chemours’ issues were active but unmoved.

The 5 3/8% senior notes due 2027 finished level at 90 bid.

Mallinckrodt diverges

Pharma name Mallinckrodt’s paper diverged throughout the day, market sources said.

The 4 7/8% senior notes due 2020 held level at 69 bid. The 5 5/8% senior notes due 2023 declined 4 points to close at 28½ bid.

On Tuesday, the Staines-upon-Thames, England-based drug producer reported mixed results with a $2.07 per share profit and revenues of $743.7 million.

At the same time, subsidiaries Mallinckrodt International Finance SA and Mallinckrodt CB launched private offers to exchange several series of their notes for up to $355 million of new notes.

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