Range Resources better post earnings; Frontier active, diverge in telecom space

By James McCandless

San Antonio, July 31 – The distressed debt space saw attention remain on tranches in the energy and telecom sectors on Wednesday.

Range Resources Corp.’s notes got a boost in trading in the wake of the company releasing positive second-quarter earnings.

Sector peer McDermott International, Inc.’s issues bounced back after falling on Tuesday in reaction to its negative second-quarter earnings report.

More gains for oil futures were mirrored in Superior Energy Services, Inc. and Southwestern Energy Co.’s paper.

Meanwhile, in telecom, Frontier Communications Corp.’s notes were active but diverged during the session.

Satellite name Intelsat SA’s issues were gaining a day after releasing its earnings report.

In the pharma space, Teva Pharmaceutical Industries Ltd. paper was mixed while Mallinckrodt plc’s notes pushed upward.

Diebold Nixdorf, Inc.’s issues were losing during the day.

Range Resources up

Energy name Range Resources’ notes received a boost on Wednesday, traders said.

The 5% senior subordinated unsecured notes due 2022 jumped up 5¼ points to close at 90¾ bid. The 4 7/8% senior unsecured notes due 2025 rose ¾ point to close at 84 bid.

Last week, the Fort Worth-based independent oil and gas producer released its second-quarter earnings report.

The company surpassed analyst expectations of breaking even by reporting a profit of 2 cents per share.

Revenues were also positive at $851 million.

“It seems to have gotten more traction today,” a trader said. “But there was a lot of activity in energy today.”

Earlier in the month, the name decided to divest in 2% overriding royalty interests in its Appalachia assets, netting $634 million in the process.

McDermott gains

Sector peer McDermott’s issues bounced back from a drop, market sources said.

The 10 5/8% senior unsecured notes due 2024 added 3¼ points to close at 82¾ bid.

On Tuesday, the 10 5/8% notes dropped 1½ points.

The Houston-based oil and gas engineering name’s structure was initially under water on Tuesday after the company’s second-quarter earnings report was made public late Monday.

It reported a loss of 7 cents per share and lagging revenues of $2.1 billion.

The name also adjusted its guidance for the rest of the year, changing gears to expecting a loss for the time period.

Oil rises

Positive oil futures were mirrored by distressed energy tranches, traders said.

Houston-based oilfield services provider Superior Energy’s paper improved.

The 7 1/8% senior unsecured paper due 2021 gained 4 points to close at 72½ bid. The 7¾% paper due 2024 picked up 1½ points to close at 60 bid.

Spring, Texas-based producer Southwestern Energy’s notes also rose.

The 6.2% senior unsecured notes due 2025 were better by ¾ point to close at 86½ bid.

West Texas Intermediate crude oil futures for September delivery added 53 cents to close at $58.58 per barrel.

North Sea Brent crude oil futures for September delivery settled at $65.17 per barrel after a 45 cent climb.

Frontier diverges

Meanwhile, in the telecom space, Frontier’s issues diverged, market sources said.

The 10½% senior unsecured notes due 2022 improved by 1¼ points to close at 63¾ bid. The 11% notes due 2025, while dropping to 57 bid during the day, held level at 58 bid.

The Norwalk, Conn.-based wireline telecom name’s notes were heavily traded on Wednesday as the market anticipated news of its most recent quarter.

“The report is supposed to come out soon,” a trader said. “A lot of people are expecting something bad.”

The company has been under scrutiny as it weighs its options over how to handle its fast-approaching maturity wall, with some stakeholders pushing for a restructure that does not involve bankruptcy.

Intelsat better

Elsewhere in the sector, Intelsat’s paper ended the session better, traders said.

Intelsat Jackson Holdings SA’s 5½% senior unsecured paper due 2023 tacked on ¼ point to close at 92½ bid. Intelsat (Luxembourg) SA’s 8 1/8% paper due 2023 gained ¼ point to close at 81 bid.

On Tuesday, the Luxembourg-based satellite operator released an earnings report with mixed results.

The company reported a loss of $1.05 per share, greater than analyst predictions.

Revenues were shown at $509.41 million.

The U.S. government’s deliberation over who gets to manage the nation’s 5G spectrum and the profits thereof are a cloud hanging over the name.

Teva mixed, Mallinckrodt improves

In pharmaceuticals, Teva’s notes were active but not uniform, market sources said.

The 3.15% senior unsecured notes due 2026 shaved off ¼ point to close at 78 bid. The 4.1% notes due 2046 added ¼ point to close at 66¾ bid.

This week, the Petach Tikva, Israel-based generic drug maker has seen renewed attention after news broke Monday that it had settled a lawsuit with California over allegations that it was paid to delay releasing generic versions of expensive drugs into certain marketplaces.

Staines-Upon-Thames, U.K.-based sector peer Mallinckrodt’s issues were seen improving.

The 5 5/8% senior unsecured notes due 2023 gained ¼ point to close at 63½ bid. The 5½% notes due 2025 gained ½ point to close at 57¾ bid.

Diebold loses

ATM maker Diebold’s issues were seen losing, traders said.

The 8½% senior unsecured notes due 2024 lopped off ¼ point to close at 98 bid.

The North Canton, Ohio-based connected commerce solutions name saw a marked improvement after releasing its second-quarter earnings report.

The company posted a profit of 6 cents per share and revenues of $1.15 billion.

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