Denbury notes mixed again after new issue prices; Sanchez Energy issues see another multi-point drop

By James McCandless

San Antonio, Aug. 15 – The distressed debt market began shifting focus to energy names in Wednesday trading.

Denbury Resources Inc. notes were mixed again. On Tuesday, the company priced a $450 million offering of senior notes.

Sanchez Energy Corp. issues saw a multi-point drop. The company recently failed to meet Q2 earnings estimates.

Diebold Nixdorf, Inc. paper declined. The company has hired financial advisers to assist in finding potential buyers.

Intelsat SA notes fell. Recently, a subsidiary priced a $1.25 billion offering of senior notes.

Frontier Communications Corp. issues were mixed. The company recently released a less than stellar earnings report.

Rite Aid Corp. paper improved. A recent canceled merger and ratings downgrade have spurred a negative trend in trading.

Denbury mixed

Plano, Texas-based independent oil and gas company Denbury Resources’ notes were mixed again, traders said. On Tuesday, the company priced an upsized $450 million issue of 5.5-year senior secured second-lien notes. The offering prompted Moody’s Investors Service to upgrade the company’s corporate credit rating and assign a B3 rating to the new notes.

The company amended and extended it credit facility to 2021 the same day.

The 6 3/8% notes due 2021 fell about 2¼ points to close at around 94¾ bid. The 5½ notes due 2022 rose 2½ points to close at 92½ bid.

On Tuesday, the 6 3/8% notes rose about 3¼ points and the 5½% notes were level.

Sanchez Energy declines

Houston-based independent oil and gas producer Sanchez Energy issues declined again, market sources said. The company recently reported a 26 cents per share loss in its Q2 earnings statement, missing the expected 6 cents per share profit. Its oil production numbers fell short of its own estimates.

“It’s been a pretty slippery slope since the earnings report,” a trader said. “There’s some talk about restructuring.”

The 5¼% notes due 2019 lost 4¼ points to close at 51¼ bid.

On Tuesday, the 5¼% notes picked up 2¼ points.

Diebold down

North Canton, Ohio-based connected commerce solutions company Diebold paper fell, traders said. Reports confirmed Monday that the company has hired Evercore and Credit Suisse as financial advisers tasked with identifying potential buyers.

Recently, the company reported a 29 cents per share loss in its Q2 earnings report, missing analyst expectations of a 1 cent per share profit.

The 8½% paper due 2024 fell about 2¼ points to close at around 68¾ bid.

On Tuesday, the 8½% paper added 1¾ points.

Volume names trade

Luxembourg-based satellite communications company Intelsat’s notes declined. Recently, subsidiary Intelsat Connect Finance SA priced a $1.25 billion offering of senior notes due 2023.

In its recent Q2 earnings report, the company showed a 38 cents per share loss, beating analyst estimates of a 37 cents per share loss. It also reported $537.71 million in revenues.

The Intelsat (Luxembourg) SA 7 % notes due 2021 shaved off about ¼ point to close at 97¼ bid. The 8 1/8% notes due 2023 lost about 1¼ points to close at around 87¾ bid.

On Tuesday, the 7¾% notes rose about ¼ point and the 8 1/8% notes gained about ½ point.

Norwalk, Conn.-based wireline communications name Frontier Communications’ issues were mixed again. Last Friday, Standard & Poor’s lowered its issuer credit rating, senior unsecured debt rating and affirmed a negative outlook.

The 7 5/8% notes due 2024 were level at 67 bid. The 10½% notes due 2022 dropped about ½ point to close at 90 bid. The 11% notes due 2025 shaved off ¼ point to close at 79½ bid.

On Tuesday, the 7 5/8% notes fell 1½ points, the 10½% notes were level and the 11% notes lost ¼ point.

Camp Hill, Pa.-based retail drugstore chain Rite Aid paper rose. Last Thursday, reports confirmed that the company had canceled a potential merger with grocery chain Albertsons Cos. LLC prior to a shareholder vote.

On Tuesday, Standard & Poor’s lowered its outlook on the company from stable to negative and affirmed the B issuer credit rating.

The 7.7% paper due 2027 gained about 3 points to close at 80 bid.

On Tuesday, the 7.7% paper lost about 1 point.

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