Talen, Transocean up; Envision heads higher; Team Health off; Diebold Nixdorf rebounds

By Cristal Cody

Tupelo, Miss., May 4 – The Federal Reserve’s largest rate hike in over two decades sent a positive ripple through the equity markets on Wednesday, while distressed bonds mostly saw an upswing in light trading.

“The day was relatively quiet going into the Fed,” a source said. “Not a ton of surprises in terms of the release. There’s not really a ton of activity going on – people are sort of digesting it. The equity market preformed really well.”

The Nasdaq closed up 3.19%, while volatility fell after the Federal Reserve raised the target range for the Federal Funds rate by 50 basis points to ¾% to 1%.

The iShares iBoxx High Yield Corporate Bond ETF rose 1.02% to $79.44.

The Chicago Board Options Exchange’s CBOE Volatility index dropped 13.64% by the close to 25.26.

June and July crude oil prices climbed.

West Texas Intermediate crude oil benchmark futures for June deliveries settled $5.40 higher at $107.81 a barrel.

Talen Energy Supply LLC’s 10½% senior notes due 2026 (C/CC/CCC) were quoted trading up 3 points.

Offshore driller Transocean Inc.’s 8% debentures due 2027 (Ca/CCC) gained 2 points to head out at 81 bid on $1 million of secondary volume, a source said.

“Some of the energy credits are up,” a market source said. “Talen is up a little bit. They’ve got some interest payments coming up on some of the debt.”

Envision Healthcare Corp.’s 8¾% senior notes due 2026 (Ca/CC) continued to improve on Wednesday after starting to reverse Monday’s losses on Tuesday.

The notes were up 3 points by the close.

Team Health Holdings, Inc.’s 6 3/8% senior notes due 2025 (Caa3/CCC/CCC-) traded strongly over the day, going out about 2¼ points weaker.

Meanwhile, Diebold Nixdorf Inc.’s 8½% notes due 2024 (Caa1/CCC) traded over 1 point better on Wednesday after gaining about 7½ points in the prior two sessions.

“It’s got a bit of a rebound,” a source said.

Talen Energy higher

Talen’s 10½% senior notes due 2026 (C/CC/CCC) moved up about 3 points on Wednesday to 40 bid, 41 offered, a market source said.

The notes opened the week at the 37 bid area.

The issue traded at 23¾ bid at the start of April.

Talen faces a June 1 interest payment coming up on some of its bonds, the source said.

The Woodlands, Tex., and Allentown, Pa.-based power generation and infrastructure company’s paper declined and its credit default swap spreads moved out in March on reports of restructuring talks.

Envision improves

Envision Healthcare’s 8¾% senior notes due 2026 (Ca/D) traded 3 points better at 38½ bid by the close on Wednesday, a market source said.

The notes traded up 1 point to 2 points on Tuesday before ending the day 1 point better after shedding over 6 points on Monday.

S&P downgraded the Nashville-based health care company and hospital-based physician group and the notes on Tuesday after Envision conducted a $2.6 billion distressed exchange with proceeds used to repurchase part of its outstanding term loans and notes at below par.

Team Health soft

Team Health’s 6 3/8% senior notes due 2025 (Caa3/CCC/CCC-) saw a busy session on Wednesday, a source said.

The bonds were trading about 2¼ points weaker at 81¾ bid on $14 million of volume.

Team Health’s paper traded as much as over 6 points weaker before improving by the afternoon.

The Knoxville, Tenn.-based medical staffing firm is owned by Blackstone Group LP.

Diebold Nixdorf recovers

Diebold Nixdorf’s 8½% notes due 2024 (Caa1/CCC) were quoted over 1 point better on Wednesday at 74½ bid, 75½ offered, a source said.

The notes recovered 5½ points on Tuesday and 2 points on Monday after losing 10½ points on Friday.

The Hudson, Ohio-based financial technology company will release its first-quarter earnings report on Tuesday.

Distressed returns up

S&P U.S. High Yield Corporate Distressed Bond index returns improved over the second session of May.

One-day total returns rose to 0.28% on Tuesday from minus 0.72% on Monday.

Month-to-date total returns increased to minus 0.44% versus minus 0.72% at the start of the week.

Year-to-date index returns improved to minus 8.29% from minus 8.55% on Monday.

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