Diebold notes jump as rescue loan secured; J.C. Penney issues improve after week of negative news

By James McCandless

San Antonio, Aug. 27 – At the start of the week in distressed debt trading, news-driven names were at the top of trading.

Diebold Nixdorf, Inc. notes gained after the company announced that it had secured a $650 million rescue loan from two institutional lenders.

J.C. Penney Co., Inc. issues improved despite last week’s torrent of negative attention spurred on by a recent disappointing earnings report.

Sanchez Energy Corp. paper rose. The company didn’t meet analyst expectations in a recent second-quarter earnings report.

Intelsat SA notes were mixed to start the week. A subsidiary recently priced a $1.25 billion issue of senior notes.

Frontier Communications Corp. issues were also mixed. A recent second-quarter earnings report did not meet analyst predictions.

Rite Aid Corp. paper gained. The company recently canceled a potential merger with grocery chain Albertsons.

Diebold up

North Canton, Ohio-based connected commerce solutions company Diebold notes gained, traders said, after reports confirmed that the company has secured a $650 million rescue loan from two institutional lenders to help with liquidity. Last week, reports surfaced that JPMorgan Chase & Co. was working on securing the loan. The company is also in the process of amending its credit agreement.

“That’s some good news for them,” a trader said. “They were asking for $500 million. But I don’t think it makes a lot of difference for their long-term troubles.”

The 8½% notes due 2024 rose 4¾ points to close at 70½ bid.

On Friday the 8½% notes lost about 2 points.

J.C. Penney rises

Plano, Texas-based department store chain J.C. Penney issues improved, market sources said, as the company continues to weather negative news following a dismal earnings report. Recently, the company reported a 38 cents per share loss, falling short of analyst predictions of a 5 cents per share loss. The report triggered a string of ratings downgrades.

“Apparently they’re having trouble locking down a dedicated customer base,” a trader said. “If they don’t figure that out, then they’ll be the next Sears.”

The 7.4% bonds due 2037 gained 2¾ points to close at 51½ bid.

On Friday, the 7.4% bonds added 1¼ points.

Sanchez gains

Houston-based independent oil and gas name Sanchez Energy paper rose, traders said. Recently, the company reported a 26 cents per share loss in its second-quarter earnings statement. The loss was a surprising shortfall, where analysts expected a profit of 6 cents per share. Its oil production numbers fell short of its own guidance.

The 6 1/8% paper due 2023 rose about 1¼ points to close at around 58½ bid.

On Friday, the 6 1/8% paper lost about 1½ points.

Volume names trade

Luxembourg-based satellite communications company Intelsat’s notes were mixed again to start another week. Subsidiary Intelsat Connect Finance SA recently tapped the market for a $1.25 billion offering of senior notes due 2023.

In a recent second-quarter earnings report, the company showed a 38 cents per share loss. It also reported $537.71 million in revenues.

The Intelsat (Luxembourg) SA 7 ¾% notes due 2021 picked up about ½ point to close at 96½ bid. The 8 1/8% notes due 2023 shaved off about ¼ point to close at around 86¾ bid.

On Friday, the 7¾% notes fell about ¼ point and the 8 1/8% notes were level.

Elsewhere in distressed telecom, Norwalk, Conn.-based wireline communications name Frontier Communications issues were also mixed.

After a recent disappointing earnings report, Standard & Poor’s downgraded its issuer credit rating, senior unsecured debt rating and affirmed a negative outlook.

The 7 5/8% notes due 2024 lost about ¼ point to close at around 65½ bid. The 10½% notes due 2022 were level at 89¾ bid. The 11% notes due 2025 fell about ¼ point to close at 78½ bid.

On Friday, the 7 5/8% notes rose about ¾ point, the 10½% notes fell about ½ point and the 11% notes lost about ¼ point.

Camp Hill, Pa.-based retail drugstore chain Rite Aid’s paper improved by the end of Monday trading. Recently, the company canceled a potential merger with grocery chain Albertsons Co. LLC before the move could be put to a shareholder vote.

The 7.7% paper due 2027 traded up about ¾ points to close at around 81 bid.

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