Endo, Mallinckrodt, Team Health lower; Envision Healthcare up; PBF, Talen drop; AMC off

By Cristal Cody

Tupelo, Miss., Jan. 24 – Distressed pharmaceutical and health care bonds traded mostly lower on Monday.

Endo International plc’s bonds fell 1 3/8 points after shedding 2½ points on Friday following the company’s announcement of a $65 million opioid-related settlement with Florida.

Mallinckrodt plc’s notes were lower in thin trading.

Team Health Holdings, Inc.’s 6 3/8% senior notes due 2025 (Caa3/CCC) softened 1¼ points.

Meanwhile, Envision Healthcare Corp.’s 8¾% senior notes due 2026 (Ca/CC) traded up ½ point on Monday after declining over 3½ points in the prior week.

Market tone improved by the afternoon in equities, while oil receded over $1.50 on the day.

The iShares iBoxx High Yield Corporate Bond ETF closed down 9 cents at $85.35.

West Texas Intermediate crude oil benchmark futures for March deliveries dropped $1.83 to settle at $83.31 a barrel.

Distressed energy bonds were lower by the close.

PBF Energy Inc.’s 7¼% senior notes due 2025 (Caa1/B/B-) went out down about 1 point at 78 bid, a source said.

The Parsippany, N.J.-based petroleum refiner’s bonds ended the prior week about 2½ points lower.

Talen Energy Supply LLC’s 10½% senior notes due 2026 (Caa2/CCC/B-) dropped 2 points after Moody’s Investors Service downgraded the company following the closing of an $848 million first-lien financing.

AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 (Ca/CCC-) were the most active issue seen in distressed trading on Monday with the bonds attracting $20 million of volume, a source said.

The notes dropped 1 point as the company’s shares fell over 7% to $16.64, well off the 52-week high of $72.67.

Endo notes soften

Endo Finance LLC’s 6% senior notes due 2028 (Caa3/CCC-) traded off 1 3/8 points at 68½ bid over the session, a source said.

The notes went out 2½ points lower on Friday.

The issue is over 5 points weaker since the end of December.

Endo announced on Jan. 18 the latest $65 million opioid-related settlement with Florida.

The company reported in September that it reached a $7.5 million agreement with the Louisiana Attorney General's office and settled three opioid-related cases in New York for $50 million.

The Dublin-based pharmaceuticals maker announced in July a $35 million settlement in Tennessee.

Endo’s paper traded heavily in December after a California trial court issued a final ruling that Endo’s subsidiaries are not liable for opioid claims in the state.

Mallinckrodt lower

New York’s opioid-related lawsuits against Mallinckrodt are continuing in U.S. Bankruptcy Court.

Mallinckrodt’s paper has been lightly traded so far in January, a source said Monday.

The company’s 5¾% notes due 2022 were 2¼ points lower at 54 bid over the afternoon after last trading on Jan. 13 at 56¼ bid.

The bankrupt pharmaceuticals company filed an amended Chapter 11 plan and first amended joint plan of reorganization in 2021 in the U.S. Bankruptcy Court for the District of Delaware.

Mallinckrodt received a court order in November that extended the reorganization plan filing period through March 8 and the solicitation period through May 10.

The Dublin- and St. Louis-based company filed for Chapter 11 bankruptcy on Oct. 12, 2020.

Team Health declines

Team Health Holdings’ 6 3/8% senior notes due 2025 (Caa3/CCC) fell 1¼ points on Monday to 87¾ bid, a market source said.

The notes were over 2 points softer in the prior week.

The Knoxville, Tenn.-based medical staffing firm is owned by Blackstone Group LP.

Envision gains

In other health care issues, Envision Healthcare’s 8¾% senior notes due 2026 (Ca/CC) traded up ½ point on Monday to 52½ bid, a source said.

The notes were over 3½ points lower in the prior week.

The issue is down from a 90 handle in September.

Nashville-based Envision is a health care company and hospital-based physician group.

Talen notes slip

Talen’s 10½% senior notes due 2026 (Caa2/CCC/B-) fell 2 points to 46 bid by the close on Monday following the Moody’s downgrade, a source said.

The issue saw $2 million of secondary volume.

The Woodlands, Tex., and Allentown, Pa.-based energy company’s notes are up about 2½ points since December.

Moody’s lowered the company’s ratings on Monday following the closing of Talen’s $848 million first-lien financing earlier in January.

Talen drew down the full $848 million commitment and used the proceeds to repay $238 million drawn on an existing revolving credit facility, repay an $114 million senior unsecured debt maturity due in December 2021 and pay $60 million for surety purposes and other fees, Moody’s said.

“The remaining $393 million is being held by Talen as cash on hand and is the company's main source of liquidity right now,” according to Moody’s.

Fitch Ratings also downgraded the company this month following the financing.

AMC paper drops

AMC’s 10% senior secured second-lien notes due 2026 (Ca/CCC-) slipped 1 point to 93 bid over the session on $20 million of paper traded, a source said.

AMC’s 5¾% notes due 2025 (Ca/CCC-) also went out 2 points weaker at 73¼ bid on $1.25 million of volume.

The Leawood, Kan.-based movie theater owner’s bonds have been heavily traded in January following reports the company is considering refinancing debt in 2022.

Distressed returns down

Distressed index returns slid on Friday and remained soft for the holiday-shortened week.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return fell to minus 1.08%, compared to minus 0.21% on Thursday, a positive 0.12% on Wednesday and minus 0.34% on Tuesday.

Month- and year-to-date index returns dropped to minus 0.35% on Friday from 0.74% on Thursday, 0.95% on Wednesday and 0.83% on Tuesday.

© 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.