California Resources higher with oil; Intelsat up ahead of earnings; iHeart ticks lower with looming exchange tender

By Colin Hanner

Chicago, April 26 – Business as usual continued in the distressed debt market on Wednesday, traders said, which meant that the same tame trading seen of late continued.

Of the most-active issuances, California Resources Corp. was higher as crude oil futures snapped a six-day drought of gains with a fractional gain.

A day following its first-quarter results, Freeport McMoRan Inc. saw continued gains on the session, and though not distressed, U.S. Steel Corp. announced dismal first-quarter numbers on Wednesday, causing one of its long-term notes to fall several points into the high-80s range.

Ahead of its earnings on Thursday, Intelsat SA’s subsidiaries were trading higher on the session, led by Intelsat Jackson Holdings SA.

With its tender exchange deadline approaching on Friday, iHeartCommunications, Inc.’s notes were again a “smidge” weaker, a trader said, building on losses from Tuesday.

Pharmaceutical companies were higher on the day, with Candian Valeant Pharmaceuticals International Inc. contributing the most from the distressed realm.

A string of retailers were higher or flat on the session, and a handful of one-off distressed names continued to trade on lackluster trading in the market.

California gaining

California Resources’ 8% notes due 2022 were up ¾ point to 77¾, a trader said, while another trader said the notes were up closer to a point to the same handle.

A market source quoted the notes with a 77½ bid, 78¼ offer.

West Texas Intermediate crude oil was still below $50 per barrel after a 0.5% bump on the day.

Mixed metals

On Tuesday, gold, silver and copper producer Freeport McMoRan posted gains across stocks and bonds and continued the trend on Wednesday.

Its 5.45% notes due 2043 were up 1¾ point to 85¾, a trader said. Its most active issue, the 7 3/8% notes due 2020, were down 1 point to 107.

On the other hand, U.S. Steel announced poor first-quarter results on Wednesday, including a loss of 83 cents per share, doubling down on expectation of a loss of 35 cents per share.

Its stock plunged $8.33, or 26.78%, to $22.78.

Intel higher ahead of earnings

Intelsat Jackson Holdings SA’s 7¼% notes due 2020 were up 3/8 point to 93 5/8, while the similarly held 5½% notes due 2023 were up 3/8 point to 85½.

Intelsat Luxembourg Holdings SA’s 8 1/8% notes due 2023 were a “little better” at 58, a trader said.

The satellite telecommunications company will hold an investor conference call for its first quarter earnings on Thursday morning at 8:30 a.m. ET.

iHeart leaks as exchange looms

Already pushed back three times, private exchange offers for five series of priority guarantee notes and senior notes due 2021 are set to be completed at the end of business on Friday, including its 14% notes due 2021, which were down ½ point on Wednesday to 29.

As of 5 p.m. ET on April 12, $3.1 million of the existing notes had been tendered for exchange, up from none on April 4.

The offers will now continue until 5 p.m. ET on April 28, extended from April 21 and before that April 14.

As reported in March, the company is offering to swap out its $1,999,815,000 of 9% priority guarantee notes due 2019, $1.75 billion of 9% priority guarantee notes due 2021, $809,946,000 of 11¼% priority guarantee notes due 2021, $1 billion of 9% priority guarantee notes due 2022, $950 million of 10 5/8% priority guarantee notes due 2023 and its $1,746,460,109 of senior notes due 2021.

Pharma higher

Valeant Pharmaceuticals entered the mix on Wednesday after a muted Tuesday, trading higher in its 5 7/8% notes due 2023, which were up ¼ point to 74½.

Its 6 1/8% notes due 2025 were up ½ point to 74 3/8.

Moving higher on one trade, Concordia International Corp.’s 9½% notes due 2018 were up 1½ points to 18½.

Retail higher

Though volume was on the light side, retailers were higher on the day. One trader said there was not notable movement in Neiman Marcus Group, Inc., but it was inching higher on the session.

Retailer J. Crew Group Inc.’s 7½% notes due 2019 were up ½ point to 50½, a trader said.

Two of J.C. Penney Co, Inc.’s longer-dated issues were higher, including the 6 3/8% notes due 2036, up 1/8 point to 76½, and its 7.40% notes due 2037, up ¼ point to 81¾.

And Claire’s Stores Inc.’s 9% notes due 2019 printed once at 46½, unchanged on the session.

Distressed wrap

Continuing to stay in the mix, grocery store chain Fresh Market Inc.’s 9¾% notes due 2023 were up ¾ point to 86.

Publishing company McClatchy Co.’s 6 7/8% notes due 2029 were up ½ point to 83.

Columbus, Ohio-based Hexion Inc.’s 9% notes due 2019 were unchanged at 83¾.

And construction equipment rental company Ahern Rentals Inc. was up 1/8 point in its 7 3/8% notes due 2023, which finished at 86.

Susanna Moon contributed to this review

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