Earnings-related activity moves Community Health, Fresh Market, CF Industries; California Resources goes low

By Colin Hanner

Chicago, May 3 – Earnings-related activity continued to stir movement in the distressed debt market on Wednesday, traders said, but overall activity paled in comparison to a day prior.

“A lot of trading has been earnings-related,” a trader said. “People were waiting for [earnings] to dictate some direction, but there hasn’t been a ton of notables.” Benchmark bonds for Frontier Communications Corp. were among the most active in all of Junkbondland, though traded out of distressed territory.

Community Health Systems, Inc. remained active, traders said, as did Valeant Pharmaceuticals International, Inc., though activity was more muted than during Tuesday’s session.

On Tuesday, privately-held grocery store chain Fresh Market, Inc. was several points higher after the company released its earnings and was flat-to-slightly higher on Wednesday’s session, a trader said.

On the other hand, CF Industries Holdings, Inc. released its first quarter results after the closing bell, with its bonds either flat or down before its release.

The recent downfall of California Resources Corp. was further cemented on Wednesday, as crude oil futures continued to fall, bringing down several other exploration and production names.

Rental groups Hertz Global Holdings, Inc. and Rent-A-Center, Inc. tapered off from Tuesday’s swings and were either flat or barely changed on the day.

Health and pharma echo into Wednesday

Community Health “quieted down a little bit,” a trader said, particularly in its 6 7/8% notes due 2022, which were up 1/8 point to 87 5/8. Another trader said the notes were unchanged at 87½.

The Franklin, Tenn.-based hospital operator’s 7 1/8% notes due 2020 were up ¼ point to 95¼, while its 8% notes due 2019 were up ½ point to 100 1/8.

In pharmaceuticals, Valeant’s “active as always” 5 7/8% notes due 2023 were up 1/8 point to 76, a trader said.

Its 5½% notes due 2023 were up ¾ point to 76.

And Endo International plc’s 6% notes due 2023 were down 1 point to 86½ on a “half-dozen” trades, a market source said.

Freshly high

Though its earnings are not made public, Fresh Market was progressing again on Wednesday after a 3- to 4-point increase on Tuesday.

Its 9¾% notes due 2023 were ¾ point higher to an 86¾ handle, a trader said.

CF posts loss

Deerfield, Ill.-based CF Industries Holdings, Inc. saw flat and declining movement in its distressed bonds on Wednesday prior to its first quarter results.

Its 5.15% notes due 2034 were down 1½ points to 89, a trader said, while its 4.95% notes due 2043 were unchanged at 84.

Among its results, the company reported a $23 million net loss, compared to a $26 million profit the same time last year.

Energy faring worse

Crude oil futures fell again on Wednesday, fueled by a worse-than-expected decline of crude stockpiles, according to the Energy Information Agency.

Those figures did not bode well for California Resources’ 8% notes due 2022, which were off 3/8 point to 73 7/8.

Canadian oil sands producer MEG Energy Corp.’s 7% notes due 2024 were down 1¾ points to 87¾, a market source said.

A market source said Plano, Texas-based oil and natural gas producer Denbury Resources Inc.’s 6 3/8% notes due 2021 were down ½ point to 79¾.

Offshore drilling contractor Ensco plc’s 4½% notes due 2024 were unchanged at 83.

Away from oil, energy producer Talen Energy Corp.’s 6½% notes due 2025 were down ½ point to 75¾, a trader said.

Rentals fail to see much movement

Car rental and sales company Hertz Global Holdings’ 6¾% notes due 2019 were “pretty much unchanged,” down ¼ point to 99½, a trader said.

Its 5½% notes due 2024 were down ½ point to 84½.

And its 7 3/8% notes due 2021 were off 1/8 point to 95¼.

Rent-to-own retailer Rent-A-Center’s 4¾% notes due 2021 were unchanged at 89½.

Resolutely positive

Resolute Forest Products Inc. continued its upward trek after retreating earlier last week by several points. Its 5 7/8% notes due 2023 were up ½ point to 97, a trader said.

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