Post earnings, California Resources up as crude oil rebounds; GenOn ‘not as active,’ but up; Revlon, Neiman down

By Colin Hanner

Chicago, May 5 – With crude oil getting a reprieve in the futures market on Friday, distressed exploration and production companies were mixed, market sources said, with losses not nearly as inflated as previous sessions.

Elsewhere, first quarter earnings continued to shape movement in the market.

Among those, California Resources Corp. was up “on a nice rebound in oil,” a trader said, though another trader said positive quarterly earnings were behind the movement.

MEG Energy Corp. was unchanged, and Noble International Holdings Inc. was down fractionally.

GenOn Energy, Inc. took a backseat to Thursday’s activity following a proposed offering announcement though it traded higher in the three issues.

In the retail space, Revlon, Inc. was down several points following its earnings, and Neiman Marcus Group, Inc. was down following a story from New York Post that described a breakdown of a merger between the upscale retailer and Hudson Bay Co.

A day following the passage of the American Health Care Act through the House, Community Health Systems, Inc. was higher, nearing the levels it reached before the bill passed in the House.

Valeant Pharmaceuticals International, Inc. was mixed on the session.

Oil mixed, led by California Resources

California Resources’ 8% notes due 2022 were up 2½ points to 74, market sources said.

The California-based oil and gas exploration and production company reported net income of $53 million, a year-over-year gain compared to the $50 million loss during the same period in 2016.

More notably for investors, California Resources reduced its debt by $147 million from the end of 2016.

In a similar earnings boat, Pacific Drilling Co.’s 5 3/8% notes due 2020 were down 2 points to 46.

The driller reported a $99.8 million net loss for the quarter compared to a net loss of $2.5 million in the similar quarter last year. The company reported its current debt load as $3 billion.

In the broader market, West Texas Intermediate crude oil was up by more than 1% to finish above $46 a barrel, though companies were mixed in reaction to the movement.

Noble Holdings’ 7¾% notes due 2024 were down ¼ point to 90, off the lows of its intraday trading level, a market source said.

Canadian oil sands producer MEG Energy’s 6 3/8% notes due 2023 were unchanged at 84¾.

EP Energy Corp.’s 8% notes due 2025 were up ½ point to 87.

And offshore driller Transocean Ltd.’s 6.80% notes due 2038 were down ¾ point to 77.

GenOn up, though not as active

GenOn continued to stay in the mix following the proposed issuance of five-year $540 million 10½% notes due 2022. That new issue was quoted at 104 at the end of the session, a trader said.

Its 9 7/8% notes due 2020 were up ¾ point to 61¾, and its 9½% notes due 2019 were up ½ point to 65¾.

And the 7 7/8% notes due 2017, which, with net proceeds from the new issue along with cash on hand will be redeemed or discharged, were up 3 points to 89.

Retail down

It was an about-face for the quarter for cosmetic retailer Revlon, which posted a $37.4 million net loss for the first quarter, compared to net income $11 million year-over-year.

Though not entirely distressed, its 6¼% notes due 2021 were leaking into the territory, down 5 points to 91½, traders said.

The New York Post reported that Neiman Marcus faces a potential lawsuit from its term loan lenders and bondholders over the concealing of certain stores that were put into a subsidiary company and its distressed bonds took notice.

The 8% notes due 2022 were down 2 points to 56¼, a market source said.

Health and pharma

With the future of the American Health Care Bill left to the Senate, Community Health gained back its losses from Thursday in its 6 7/8% notes due 2022 were up ¼ to ½ point to 87½.

Seeing “pretty heavy volume,” Valeant Pharmaceuticals’ 6 1/8% notes due 2025 were down 1/8 point to 75¾, a trader said.

Its 5 7/8% notes due 2023 were up 5/8 point to 76¼.

And its 5½% notes due 2023 were up 3/8 point to 75 5/8.

Elsewhere in the pharmaceutical sphere, Endo International plc’s 5 3/8% notes due 2023 were up ¼ point to 84 1/8, a trader said.

And Concordia International Corp.’s 7% notes due 2023 were down ¼ point to 17½.

Distressed wrap

Music retailer Guitar Center, Inc.’s 6½% notes due 2019 were up ½ point to 87 1/8.

And Intelsat Jackson Holdings SA’s 7¾% notes due 2021 were up ¼ point to 57¼.

© 2015 Prospect News.
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