J.C. Penney declines amid negative attention; Ultra Resources falls in wake of downgrade

By James McCandless

San Antonio, Aug. 24 – As the distressed debt market ended the week, activity centered on retail and oil names.

J.C. Penney Co., Inc. notes declined after a week of gains. Following a negative earnings report, the company received a string of ratings downgrades.

Ultra Resources Inc. issues fell. On Thursday, the company received a ratings downgrade near the market close.

Sanchez Energy Corp. paper lost again. The company missed analyst expectations in a recent second-quarter earnings report.

Intelsat SA notes ended the week mixed. Recently, a $1.25 billion issue was priced by a subsidiary.

Frontier Communications Corp. issues were also mixed. The company posted an earnings report recently that fell below expectations.

Diebold Nixdorf, Inc. paper dropped in Friday trading. One of the company’s largest lenders is trying to secure a rescue loan.

J.C. Penney down

Plano, Texas-based department store chain J.C. Penney’s notes declined, traders said, after a week of trending positively despite a flurry of negative news. Last Thursday, the company reported a 38 cents per share loss, missing analyst expectations of a 5 cents per share loss. The report resulted in a string of ratings downgrades.

“I think short sellers were taking it easy this week, at least on J.C. Penney,” a trader said. “It finally started to go down today with all of the bad press it’s been getting.”

The 7.4% bonds due 2037 lost 2¼ points to close at 48¾ bid.

On Thursday, the 7.4% bonds rose 1¼ points.

Ultra Resources off

Ultra Resources, a subsidiary of Houston-based independent oil and gas producer Ultra Petroleum Corp., saw issues decline, market sources said. On Thursday, Moody’s Investors Service downgraded its corporate family rating and several issue-level ratings near the end of the day’s trading.

Its parent company recently reported a 17 cents per share profit, not reaching analysts predictions of 18 cents per share profit. It also reported $190.14 million in revenues.

The 7 1/8% notes due 2025 fell 2¾ points to close at 45 bid.

On Thursday, the 7 1/8% notes gained 3 points.

Sanchez Energy negative

Houston-based independent oil and gas name Sanchez Energy also saw paper declining in the energy space, traders said. Recently, the company reported a 26 cents per share loss in its second-quarter earnings statement, coming in on the opposite side of analyst expectations of 6 cents per share profit. Its oil production numbers fell short of its own guidance.

The 6 1/8% notes due 2023 shaved off about ¼ point to close at around 57¼ bid.

On Thursday, the 6 1/8% notes lost about 1½ points.

Volume names trade

Luxembourg-based satellite communications company Intelsat’s notes closed the week mixed. Subsidiary Intelsat Connect Finance SA recently priced a $1.25 billion offering of senior notes due 2023.

In a recent second-quarter earnings report, the company posted a 38 cents per share loss. It also reported $537.71 million in revenues.

The Intelsat (Luxembourg) SA 7 ¾% notes due 2021 fell about ¼ point to close at around 96 bid. The 8 1/8% notes due 2023 were level at 87 bid.

On Thursday, the 7¾% notes dropped about ¾ point and the 8 1/8% notes added about 1½ points.

Norwalk, Conn.-based wireline communications name Frontier Communications issues were once again mixed. Recently, following a disappointing earnings report, Standard & Poor’s downgraded its issuer credit rating, senior unsecured debt rating and affirmed a negative outlook.

The 7 5/8% notes due 2024 rose about ¾ point to close at around 66¾ bid. The 10½% notes due 2022 fell about ½ point to close at 89¾ bid. The 11% notes due 2025 lost about ¼ point to close at around 78¾ bid.

On Thursday, the 7 5/8% lost about 1½ points, the 10½% notes gained about ¾ point and the 11% notes dropped about 2 points.

North Canton, Ohio-based connected commerce solutions company Diebold paper dipped. One of the company’s largest lenders, JPMorgan Chase & Co., is shopping a $500 million rescue loan on its behalf.

The 8½% paper due 2024 lost about 2 points to close at 65¾ bid.

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