Sanchez Energy notes decline on management change; FirstEnergy Solutions issues climb on asset sale

By James McCandless

San Antonio, July 11 – Trading levels in the distressed debt market continued to creep upward Wednesday as focus remained on news-driven names.

Sanchez Energy Corp. notes fell, jumping up in activity after the company announced the departure of chief operating officer Christopher Heinson.

FirstEnergy Solutions Corp. issues rose a day after the company reached a definitive agreement to sell its retail power business.

PetSmart, Inc. paper declined. The company recently filed a lawsuit against its former loan agent over a transfer that has driven a wedge between it and its creditors.

Frontier Communications Corp. notes were mixed. The company recently announced the resignation of chief financial officer Perley McBride.

Intelsat SA issues were mixed. The company has begun a program to buy back its 7¾% notes due 2021.

American Tire Distributors paper improved. The company’s passenger tire distribution deal with Bridgestone has been terminated.

Sanchez Energy loses

Houston-based independent oil and gas producer Sanchez Energy notes fell, traders confirmed, after the company announced the departure of COO Christopher Heinson after market close Tuesday. In a press release, chief executive officer Tony Sanchez praised Heinson for helping increase the company’s profile.

“Chris’ leadership and industry knowledge have helped transform Sanchez Energy into a leading Eagle Ford operator,” Sanchez said.

The 6 1/8% notes due 2023 dropped about 3 points to close at around 68¾ bid.

FirstEnergy Solutions trades up

FirstEnergy Solutions, a subsidiary of Akron, Ohio-based electricity producer FirstEnergy Corp., saw notes rise a day after reports confirmed that it has agreed to a $140 million sale of its retail power business to Constellation, a subsidiary of Chicago-based utilities holding name Exelon. FirstEnergy has submitted the sale for approval in bankruptcy court.

“There’s nothing I see that prevents this from getting approved,” a trader said.

The 6.05% notes due 2021 rose about 3¼ points to close at 52¼ bid. The 6.8% bonds due 2039 gained 2¾ points to close at 51¾ bid. The 6.85% bonds due 2034 picked up 1 point to close at 49¾ bid.

On Tuesday, the 6.05% notes lost about 1¾ points, the 6.8% bonds fell about 1 point and the 6.85% bonds were level.

PetSmart down

Phoenix-based pet supplies retailer PetSmart paper declined, market sources confirmed. The company recently filed a lawsuit against former loan agent Citigroup for allegedly breaching contract in a recent equity transfer of 36.5% of e-commerce segment Chewy.com. The transfer has become a point of contention between the company and its creditors.

The 5 7/8% paper due 2025 lost about ¾ point to close at 77¾ bid. The 8 7/8% paper due 2025 fell 1½ points to close at 66¼ bid.

On Tuesday, the 5 7/8% paper rose about ¼ point and the 8 7/8% paper fell 1 point.

Volume names trade

Norwalk, Conn.-based wireline name Frontier Communications notes were mixed for a third day. The company recently announced the impending resignation of CFO Perley McBride.

The 7 5/8% notes due 2024 gained 1¼ points to close at 69¾ bid. The 10½% notes due 2022 shaved about off ¼ point to close at around 90 bid. The 11% notes due 2025 rose about 1½ points to close at around 81½ bid.

On Tuesday, the 7 5/8% notes shaved off ¼ point, the 10½% notes were level and the 11% notes were level.

Elsewhere in telecom, Luxembourg-based satellite communications company Intelsat issues were mixed. Recently, the company announced that it would buy back its Intelsat (Luxembourg) SA 7¾% senior notes due 2021.

The 7¾% notes due 2021 were level at 94 bid. The 8 1/8% notes due 2023 rose ¼ point to close at 81¾ bid.

On Tuesday, the 7¾% notes rose about ¼ point and the 8 1/8% notes lost about ½ point.

Huntersville, N.C.-based tire distributor American Tire paper rose. Last Thursday, Bridgestone announced that it would end its passenger tire distribution deal with the company.

The 10¼% notes due 2022 gained about ¾ point to close at 26½ bid.

On Tuesday, the 10¼% notes rose about ¼ point.

“Slowly but surely we are seeing more activity,” a trader said. “Sanchez, for example, really jumped after their news. And more earnings are coming up so that’s something that will drive us forward.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.