Murray Energy notes better after dip from Q1 report; American Tire issues gain for second day

By James McCandless

San Antonio, May 16 – Traders reported moderate activity in the distressed debt market on Wednesday with names trading mostly on earnings.

Murray Energy Corp. notes gained after tumbling on Tuesday as the company posted its Q1 report.

American Tire Distributors issues gained as the company tries to regain investor confidence after losing a distribution partnership with Goodyear.

Ultra Petroleum Corp. paper shaved off some of Tuesday’s gains, continuing a downward trend that started when the company released its Q1 report last Thursday.

Intelsat SA notes were mixed. Recently, the company posted a disappointing Q1 report. Frontier Communications Corp. issues were down. Another telecom in high demand, the company recently posted a subpar Q1 report. Hexion Inc. paper traded down.

Murray Energy gains

St. Clairsville, Ohio-based coal producer Murray Energy notes regained some of its losses, traders confirmed, after Tuesday’s decline. The company posted its Q1 report on Tuesday, which is only available to noteholders.

“There was a feeling of disappointment yesterday,” a trader said. “But there was a bit of a correction today.”

The 11¼% notes due 2021 rose 1½ points to close at 42 bid.

The 11¼% notes dropped 2¼ points on Tuesday.

American Tire rises

Huntersville, N.C.-based tire distributor American Tire issues traded up again, according to a market source, as the company attempts to reassure investors that its balance sheet will remain stable despite losing its distribution deal with Goodyear.

The former partnership was worth 20% of the company’s business.

The 10¼% notes due 2022 gained 3 points to close at 52 bid.

The 10¼% notes gained 1 point on Tuesday.

Ultra Petroleum down

Houston-based independent oil and gas producer Ultra Petroleum paper lost some of Tuesday’s gains, traders confirmed. Last Thursday, the company’s Q1 reported showed a profit of 24 cents per share and a net income of $47.5 million, reversing a loss from last quarter.

“Oil futures were positive today,” a trader said. “Ultra is very much tied to that and any major shift would increase scrutiny on them.”

The 7 1/8% paper due 2025 lost ¾ point to close at 63¼ bid. The 6 7/8% paper due 2022 fell 1 point to close at 68¾ bid.

On Tuesday, the 7 1/8% paper gained about 4 points and the 6 7/8% paper rose about 5½ points.

Volume names trade

Luxembourg-based satellite communications company Intelsat notes were mixed Wednesday. Recently in a Q1 report the company posted a 56 cents per share loss, missing analyst predictions of 41 cents per share.

The Intelsat (Luxembourg) SA 7¾% notes due 2021 lost about 1 point to close at around 79 bid. The 8 1/8% notes due 2023 edged up ¼ point to close at 71¼ bid.

Elsewhere in telecom, Norwalk, Conn.-based wireline telecom name Frontier Communications issues declined. . Last week, the company outpaced analyst estimates by reporting a Q1 loss of 58 cents per share and $2.20 billion in revenue.

The 7 5/8% notes due 2024 traded down about 2¼ points to close at around 70¼ bid. The 10½% notes due 2022 fell about 1 point to close at 92 bid. The 11% notes due 2025 shaved off ¼ point to close at 82 bid.

Columbus, Ohio-based chemical producer Hexion paper traded down. The company posted its Q1 report on Monday, reporting a quarterly net loss of $13 million and a 9% increase in sales at $946 million.

The 9% paper due 2020 lost about ½ point to close at around 84 bid.

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