Toys ‘R’ Us up several points after posting fourth quarter results; Endo International rebounds; Valeant down

By Colin Hanner

Chicago, April 12 – The prelude to Easter could be felt in the distressed market on Wednesday, traders said, with noteworthy volume only in recent new issues in the high-yield market and Toys ‘R’ Us, Inc. after the toy retailer announced its fourth quarter earnings.

The retailer was the largest gainer with volume on the session as its fourth quarter results came in mixed.

Endo International plc rebounded in the secondary market after dropping by a round number on Tuesday’s session. Valeant Pharmaceuticals International Inc. trailed with a fractional loss.

Several one-off names traded with a small number of printed issues, traders said, speaking to the activity dying down in markets as the shortened week comes to a close.

“Activity is even lesser today” compared to Tuesday, a trader said.

“There is very little volume for issues that are trading below 60 or 70 cents on the dollar,” a trader said. “It seems like the Easter holiday is well underway.”

Toys R Us rallies

After falling ½ point on Tuesday, Toys ‘R’ Us’ 12% notes due 2021 were up 2½ points to 89 ½, a trader said. Another trader said the notes were up 3 points to an 89-zip code.

The toy giant released fourth quarter and year-end results on Wednesday.

Notably, the consolidated adjusted EBITDA was down $8 million to $792 million for the entire year, and operating earnings were $460 million, an increase of $88 million from a year prior.

"The widely recognized tough retail environment this holiday and continued weakness in the entertainment and baby categories contributed to the erosion of our top-line and an overall disappointing year,” said Dave Brandon, chief executive officer of the company.

Health care mixed as Endo gains

As Endo’s offering of $750 million of secured notes was downsized in the primary market, its 6% notes due 2023 rebounded on Wednesday, up 1½ points to 87¾, a trader said.

Fellow pharmaceutical company Valeant Pharmaceuticals International’s 6 3/8% notes due 2020 were down ¼ point to 86½.

Dallas-based health care service provider Tenet Healthcare Corp.’s 6¾% notes due 2023 were down ¼ point to 97.

And, seeing just one print was Quorum Health Corp.’s 11 5/8% notes due 2023, which were up 1/8 point to 85 7/8.

Rental cars tick higher

Avis Budget Group Inc.’s 6 3/8% notes due 2024 were up ¾ point to 99.

And Hertz Global Holdings, Inc.’s 6¼% notes due 2022 were up ¾ point to 90, though volume was very light, a trader said.

High-yield wrap-up

Supermarket chain Fresh Market Inc.’s 9¾% notes due 2023 were up ½ point to 81.

Charter Communications’ 5 1/8% notes due 2027 were down ½ point to 97¾.

And Cleveland, Ohio-based iron ore mining company Cliffs Natural Resources Inc.’s 5¾% notes due 2025 were down 1¼ to 93¾.

Jack Cooper Finance Co.’s 9¼% notes due 2020 were down 1/8 point to 36 on a “handful of trades,” a trader said.

And Intelsat Jackson Holdings SA’s 7¼% notes due 2020 were up ¼ point to 92½.

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