Distressed chemical makers trade actively, better; rising oil helps energy space; Gymboree loan firms

By Stephanie N. Rotondo

Seattle, June 29 – The distressed bond market was again trading firm on Wednesday, as the markets seemed to shake off concerns about the United Kingdom’s looming Brexit.

Chemical manufacturers were particularly active, though there was no sector- or credit-specific news to cause the moves.

A trader said Platform Specialty Products Corp.’s 6½% notes due 2022 improved 1½ points to 88. He also saw Tronox Ltd.’s 6 3/8% notes due 2020 rising a deuce to 74.

Hexion Inc. was another chemical name gaining ground, as its 6 5/8% notes due 2020 ticked up half a point to 84½, according to a trader.

Oil and gas names were also trending mostly better for the day, helped in part by an over 3.5% improvement in domestic crude oil prices.

One market source said Chesapeake Energy Corp.’s 6 5/8% notes due 2020 increased 2 points to 71½ bid, while Denbury Resources Inc.’s 6 3/8% notes due 2021 added a point to close at 70 bid.

However, another source said Chesapeake’s 3.878% notes due 2019 slipped a touch to 75¾.

For its part, oil prices closed at $49.54 a barrel. The commodity’s price was boosted by news that U.S. crude inventories declined by 4.1 million barrels last week, larger than the 2.4 million draw analysts polled by Reuters had forecast.

The drawdown was the sixth consecutive week of declines for U.S. stockpiles.

The U.S. Energy Information Administration’s report also showed that U.S. crude production had fallen by 55,000 barrels per day. In the previous report, the EIA said production was down by 39,000 bpd.

Oil prices were also being pushed up by a potential oil and gas workers strike in Norway and concerns about Venezuela’s energy sector due to power outages and equipment issues.

Gymboree loan strengthens

Gymboree Corp.’s term loan moved up to 77½ bid, 78½ offered from 74½ bid, 75½ offered in reaction to the late Tuesday announcement that the company is selling its early childhood development business, Gymboree Play & Music, to Zeavion Holding, a trader remarked.

Under the sale agreement, Gymboree will receive $127.5 million in cash proceeds from Zeavion, about $80 million net of estimated taxes.

Closing is expected to occur by mid-July, subject to certain conditions and post-closing purchase price adjustments.

If closing does not occur by mid-July, the San Francisco-based retailer has the right to terminate the definitive agreements and retain a $20 million nonrefundable deposit.

Elsewhere in the retail world, a trader said Claire’s Stores Inc.’s 9% notes due 2019 declined over 2 points to 59½.

The trader noted that the issue had not traded in some time.

Neither was there any fresh news to explain the decline.

Sara Rosenberg contributed to this article.

© 2015 Prospect News.
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