Frontier mixed after bids for Florida assets fall short; J.C. Penney down a day after CEO departure

By James McCandless

San Antonio, May 23 – Traders reported a third day of sluggish activity in the distressed debt market on Wednesday as the long weekend approaches.

Frontier Communications Corp. notes were mixed as the company reels from an auction of its Florida assets that did not reach a suitable price.

J.C. Penney Co., Inc. issues declined a day after its CEO left the company in the wake of a subpar Q1 report.

Ensco plc bonds declined after the company declared its regular quarterly dividend for common stock on Tuesday.

Intelsat SA paper traded up. Recently, the company posted a disappointing Q1 report. PetSmart Inc. notes were mixed. On Monday, the company appointed a new CEO after a nine-month search. Ultra Petroleum Corp. issues were down after the company announced that it would be relocating its headquarters.

Frontier mixed

Norwalk, Conn.-based wireline name Frontier Communications notes were mixed after the company did not receive what it considered satisfactory bids in an auction of its Florida assets, traders confirmed. The company intended to use the proceeds from the sale to help pay down its debt.

“They are going to have to accept something eventually,” a trader said. “They don’t have a lot of other options to get rid of their massive debt, and I suppose they are talking with bondholders about that right now.”

The 7 5/8% notes due 2024 were level at 68½ bid. The 10½% notes due 2022 lost about ½ point to close at around 91 bid. The 11% notes due 2025 shaved off about ¼ point to close at around 80¾ bid.

On Tuesday, the 7 5/8% notes were level, the 10½% notes gained about ½ point, and the 11% notes were level.

J.C. Penney falls

Plano, Texas-based department store chain J.C. Penney’s issues fell, market sources confirmed, after the company announced on Tuesday that chief executive officer Marvin Ellison would be leaving the company to take over as the head of Lowe’s Cos., Inc.

Last Thursday, J.C. Penney released its Q1 report, showing a 4.1% decrease in revenue year-over-year and a 22 cent loss per share that it partly blamed on inclement weather.

The 7.4% bonds due 2037 lost about 1¾ points to close at 60¼ bid. The 8 5/8% notes due 2025 fell 2 points to close at 85½ bid.

On Tuesday, the 7.4% bonds lost about 2¾ points and the 8 5/8% notes fell ¾ point.

Ensco declines

Britain-based oil and gas driller Ensco bonds gave away some of Tuesday’s gains, traders confirmed. On Tuesday, the company declared its regular quarterly dividend of 1 cent per share of common stock.

The dividend will be payable on June 15.

The 5¾% bonds due 2044 lost about ¼ point to close at 73¼ bid.

On Tuesday, the 5¾% bonds rose 2½ points.

Volume names trade

Luxembourg-based satellite communications company Intelsat paper gained. A recent Q1 report showed a 56 cents per share loss, missing analyst estimates of 41 cents per share.

The Intelsat (Luxembourg) SA 7¾% paper due 2021 jumped up about 4 points to close at around 84 bid. The 8 1/8% paper due 2023 skyrocketed about 7 points to close at around 83½ bid.

Phoenix-based pet supplies retailer PetSmart issues were mixed. On Monday, the company appointed retail executive J.K. Symancyk as its new chief executive officer.

The 5 7/8% notes due 2025 traded up ¼ point to close at 68 bid. The 8 7/8% notes due 2025 were level at 49½ bid.

Houston-based independent oil and gas producer Ultra Petroleum issues were down. The company announced on Wednesday that it would be relocating its headquarters from Houston to Centennial, Colo., to consolidate its operations.

The 7 1/8% notes due 2025 lost about 1 ¾ points to close at 63 bid. The 6 7/8% notes due 2022 fell about 1 point to close at 68½ bid.

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