Weatherford better as DIP financing approved; Teva down in pharma space

By James McCandless

San Antonio, July 5 – On the Friday after the Independence Day holiday, volume was light in the distressed space though some names in energy and pharma were in the spotlight.

Weatherford International plc’s notes ended better as the company won interim access to a $1.75 billion debtor-in-possession financing package.

As oil futures rose, California Resources Corp.’s issues also gained while Superior Energy Services, Inc.’s paper finished mixed and Ensco Rowan plc’s notes declined.

Meanwhile, in the health space, Teva Pharmaceutical Industries Ltd.’s issues were moving down.

Sector peer Mallinckrodt plc’s paper was similarly better.

Telecom name Frontier Communications Corp.’s notes trended lower as the company continues in the spotlight regarding its debt.

Intelsat SA’s issues gained during the Friday session.

Manufacturer United States Steel Corp.’s paper edged higher amid continuing uncertainty in the trade climate.

Weatherford up

In energy, Weatherford’s notes ended the day better, traders said.

The 9 7/8% senior notes due 2024 gained ½ point to close at 49¾ bid.

On Friday, the Baar, Switzerland-based bankrupt oilfield services company won court approval to access a $1.75 billion debtor-in-possession financing package on an interim basis, Prospect News reported.

The final hearing is scheduled for Aug. 1.

The financing is comprised of a $750 million revolving DIP facility and a $1 billion DIP term loan facility.

On Monday, after signaling the move in May, the company filed for Chapter 11 bankruptcy after receiving approval from creditors for a restructuring plan.

Oil futures gain

As oil futures rose, distressed energy tranches saw mixed activity, market sources said.

Los Angeles-based independent oil and gas producer California Resources’ issues gained.

The 8% senior notes due 2022 added ½ point to close at 74¼ bid.

Houston-based oilfield services name Superior Energy’s paper finished the session mixed.

The 7 1/8% senior unsecured paper due 2021 gave back 2 points to close at 70½ bid. The 7¾% paper due 2024 tacked on ¾ point to close at 66 bid.

London-based contract driller Ensco Rowan, soon to be Valaris plc, saw its notes move in the opposite direction.

The 7¾% senior notes due 2026 shaved off ¼ point to close at 74¾ bid.

West Texas Intermediate crude oil futures for August delivery added 17 cents to cap off the week at $57.51 per barrel.

North Sea Brent crude oil futures for September delivery settled at $64.23 per barrel after gaining 41 cents.

Teva down, Mallinckrodt better

Meanwhile, in pharmaceuticals, Teva’s issues spent the day moving down, traders said.

The 6¾% senior notes due 2028 lost ¼ point to close at 93 bid. The 3.15% notes due 2026 fell ½ point to close at 79½ bid.

The 6¾% notes saw about $6 million trading hands.

The Petach Tikva, Israel-based generic drug maker has been held under the market’s microscope for the last few months as questions abound over its potential liability in litigation over the opioid epidemic.

After the company recently paid a settlement of $85 million to the state of Oklahoma, analysts started weighing in on how much more money it would have to pay in order to prevent future litigation.

“There wasn’t a lot going on today, but Teva was busy,” a trader said.

Staines-upon-Thames, England-based sector peer Mallinckrodt’s paper saw a better day.

The 4¾% senior unsecured paper due 2023 shot up 2½ points to close at 74½ bid.

Frontier lower, Intelsat positive

Elsewhere, in telecom, Frontier’s notes shifted lower on Friday, market sources said.

The 10½% senior unsecured notes due 2022 dropped ¼ point to close at 66¼ bid. The 11% notes due 2025 slipped ¾ point to close at 61 bid.

This week, the Norwalk, Conn.-based wireline communications company adopted a shareholder rights plan that offers current shareholders of common stock the opportunity to purchase more at a 50 percent discount if any group acquires 4.9% or more of the stock.

The company is in the middle of working out a plan to be able to handle its 2022 maturities.

Luxembourg-based satellite name Intelsat’s issues were positive.

Intelsat Jackson Holdings SA’s 5½% senior unsecured notes due 2023 picked up ½ point to close at 92 bid. Intelsat (Luxembourg) SA’s 8 1/8% notes due 2023 rose 2¼ points to close at 79 bid.

U.S. Steel higher

U.S. Steel’s paper edged higher during the session, traders said.

The 6¼% senior unsecured paper due 2026 gained ½ point to close at 90 bid.

The paper saw $5 million trading in Friday activity.

The Pittsburgh-based steel manufacturer’s structure has seen increased focus in the last few months as the market waits on the global trade climate to improve.

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