Hexion notes trade up after Q1 results; Sears issues decline as company outlines asset-sale plans

By James McCandless

San Antonio, May 14 – Traders reported slow activity typical of a Monday in the distressed debt market.

Hexion Inc. notes traded up as the company released its Q1 report, posting a quarterly net loss of $13 million.

Sears Holdings Corp. issues lost on the day as the company begins to outline a plan for asset sales.

Revlon, Inc. paper was mixed after last week’s trend downward after the company reported a fall in Q1 revenue and earnings.

Intelsat SA notes started the week up. Recently, the company posted a poor Q1 report. Frontier Communications Corp., another name in distressed telecom, saw issues mixed a few weeks after a disappointing Q1 report. Mallinckrodt plc paper fell.

Hexion up

Columbus, Ohio-based chemical producer Hexion notes traded up, market sources confirmed, after the company released its Q1 report Monday morning. While reporting a quarterly net loss of $13 million, the company saw a 9% increase in sales at $946 million.

“They’ve been quiet for a while now,” a trader said. “This report is kind of a mixed bag for them. It might not spur activity in the long term.”

The 9% notes due 2020 gained 2¾ points to close at 84¾ bid.

Sears plans asset sales

Hoffman Estates, Ill.-based department store chain Sears issues fell as reports confirm that the company begins to plan the sale of its Kenmore brand of products along with other brands. The board is currently considering an offer from CEO Eddie Lempert’s ESL Investments.

“They’ve been trying to get some assets off of their books for a few years, but nobody’s taken the chance,” a trader said. “This is just one of the many moves they’ll try to pull as the company circles the drain.”

The 6 5/8% notes due 2018 shaved off about 1¼ points to close at around 86¼ bid. The 8% notes due 2019 lost about ¼ point to close at around 52¾ bid.

Revlon mixed

New York City-based cosmetics producer Revlon paper was mixed, traders confirmed, on the heels of the company’s disappointing Q1 report released last week. The company reported a $1.43 per share loss and the 6% decrease in its net sales at $229.1 million.

The 5¾% paper due 2021 dropped about 1¾ points to close at 71 bid. The 6¼% paper due 2024 picked up about ¼ point to close at 58 bid.

On Friday, the 5¾% paper rose about 1¾ points and the 6¼% paper traded up about ¼ point.

Volume names trade

Luxembourg-based satellite communications company Intelsat notes began the week up. Recently, the company reported a 56 cents per share loss in its Q1 report, missing analyst predictions of 41 cents per share.

The Intelsat (Luxembourg) SA 7¾% notes due 2021 jumped up 2¼ points to close at around 79¾ bid. The 8 1/8% notes due 2023 gained about 1½ points to close at around 71¼ bid.

Norwalk, Conn.-based wireline telecom name Frontier Communications issues were mixed. Last week, the company beat analyst estimates by reporting a Q1 loss of 58 cents per share and $2.2 billion in revenue.

The 7 5/8% notes due 2024 lost about ¼ point to close at around 71¾ bid. The 10½% notes due 2022 were level at 92¼ bid. The 11% notes due 2025 gained about 1½ points to close at around 83½ bid.

Britain-based drug maker Mallinckrodt saw its 4¾% paper due 2023 lose about 1 point to close at around 76½ bid.

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