Mallinckrodt recoups earlier losses; Ultra Petroleum leads energy space; retailers down

By James McCandless

San Antonio, Oct. 5 – Trading in the distressed debt market was lighter on Friday as the long weekend approached.

Mallinckrodt plc’s notes rebounded from losses sustained on Thursday after news broke that a competitor received FDA approval for a generic version of one of Mallinckrodt’s drugs.

Elsewhere in the medical space, Community Health Systems, Inc.’s issues also rebounded from the previous day.

In a mixed day for oil futures, Ultra Petroleum Corp.’s paper saw a decline. Other trading in the sector, with the focus on Bristow Group Inc., Sanchez Energy Corp. and Petrobras SA, yielded no unifying direction at the close.

In the natural gas sector, Ferrellgas Partners, LP’s notes were mixed after Thursday declines.

The retail space saw a bump of largely negative activity centered on J.C. Penney Co., Inc. and Rite Aid Corp.

Mallinckrodt rebounds

Mallinckrodt’s notes reversed earlier losses, traders said.

The 4¾% notes due 2023 added 4 points to close at 86½ bid.

On Thursday, the 4¾% notes fell 3¼ points, falling to as low as 82¼ bid, according to Trace data.

Traders sent the notes lower on Thursday after competitor Praxair announced that the FDA had approved a generic version of neonatal respiratory aid Inomax.

The drug contributed about 21% of Mallinckrodt’s second-quarter sales.

“Everyone read the headline yesterday and jumped on it,” a trader said.

Praxair still requires FDA approval for the generic drug’s delivery system before releasing it to the market.

Meanwhile, Community Health’s issues also rebounded from Thursday declines.

The 6 7/8% notes due 2022 rose 1¼ points to close at 56¼ bid.

On Thursday, the 6 7/8% notes lost 1 point.

Ultra Petroleum lower

Led by Ultra Petroleum, the energy sector saw a mixed trading day, market sources said.

The Houston-based independent oil and gas producer’s 6 7/8% paper due 2022 ended down ¼ point to 48¼ bid after starting the day at 48½ bid and shifting up and down throughout the day, according to a market source.

Houston-based offshore aviation services provider Bristow Group saw its 6¼% notes due 2022 jump up 3½ points to close at 78¾ bid.

Another Houston-based producer, Sanchez Energy’s bellwether 6 1/8% notes due 2023 were level at 58¼ bid despite moving as high as 59 bid in intraday trading, according to Trace data.

On Thursday, the 6 1/8% notes lost about 2 points.

Rio de Janeiro-based oil and gas producer Petrobras’ 5¾% paper due 2029 gained 2¼ points to close at 91¼ bid.

At the end of the session, West Texas Intermediate crude futures were up 1 cent to $74.34 per barrel. On Wednesday, futures reached $76.41 per barrel, a four-year high.

North Sea Brent crude futures lost 20 cents to $84.38 per barrel.

FerrellGas mixed

Elsewhere in the energy space, FerrellGas’ notes ended mixed, traders said.

The 6¾% notes due 2022 picked up about 1½ points to close at 82½ bid. The 6½% notes due 2021 lost 1 point to close at 85¾ bid.

On Thursday, the 6¾% notes lost 3 points and the 6½% notes fell about ¼ point.

The Overland Park, Kan.-based propane supplier posted a 63 cents per share loss in its Sept. 27 earnings report against expectations of a 41 cents per share loss.

Retail names largely lower

J.C. Penney’s paper was mixed in Friday trading, market sources said.

The 8 5/8% notes due 2025 fell 1½ points to close at 68¼ bid. The 5.65% paper due 2020 gained 2 points to close at around 93 bid.

The Plano, Texas-based department store chain’s paper has seen positive movement this week following news late Tuesday that the company appointed Jill Soltau as its new chief executive officer, ending a search that started in May with the departure of Marvin Ellison.

Soltau spent the last three years as the CEO of Jo-Ann Stores, Inc.

Meanwhile, Rite Aid’s notes fell, traders said.

The 7.7% notes due 2027 lost 1¼ points to close at 74½ bid. The 6 1/8% notes lost 2½ points to end at 88½ bid.

The Camp Hill, Pa.-based drugstore chain’s tranches fell further into distressed territory on Aug. 9 after the company nixed a potential merger with grocery chain Albertsons before putting the move to a shareholder vote.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.