Murray Energy notes gain after week of CEO comments; American Tire issues end higher

By James McCandless

San Antonio, July 20 – Friday trading in the distressed debt market tightened around the week’s popular names.

Murray Energy Corp. notes gained, capping a week of improvement as its chief executive officer called for less government involvement in energy markets.

American Tire Distributors issues rose as the company tries to fill the gaps left by the recent loss of two distribution deals with major tire firms.

Intelsat SA paper declined. Last week, the Federal Communications Commission announced the potential for a rule change that could benefit satellite companies.

Frontier Communications Corp. notes were mixed. The company’s chief financial officer recently submitted his resignation.

Hornbeck Offshore Services, Inc. issues were mixed.

PetSmart, Inc. paper traded up.

Murray Energy up

St. Clairsville, Ohio-based coal producer Murray Energy notes gained again to close the week, traders confirmed. This week, CEO Robert Murray made statements at a conference and to the media about ending subsidies for wind farms, the progress being made to protect the coal industry and the need for the federal government to increase its efforts in that protection.

Murray and other energy companies have lobbied the Department of Energy to consider providing federal assistance to at-risk coal and nuclear power plants. Secretary of Energy Rick Perry has stated that the department is studying the costs of implementing federal protections.

“It looks like a tossup on whether or not they get the aid they want,” a trader said. “Seems like they have the ear of the government so I wouldn’t be surprised by some form of assistance coming out of this.”

The 11½% notes due 2021 traded up about ½ point to close at around 75½ bid.

On Thursday, the 11½% notes jumped up about 3 points.

American Tire improves

Huntersville, N.C.-based tire distributor American Tire issues ended rising after a mixed week, market sources confirmed. Last Friday, executives held a conference call to try and persuade them that a recent loss in business would not hurt future growth opportunities. Both Bridgestone and Goodyear recently ended their distribution deals with the company.

The 10¼% notes due 2022 gained ½ point to close at 30 bid.

On Thursday, the 10¼% notes lost about 3 points.

Intelsat down

Luxembourg-based satellite communications company Intelsat notes lost at the end of the week, traders confirmed. The FCC announced last Thursday that it would consider a rule change that would allow mobile providers to access airwaves currently restricted to traditional broadcasters, paving the way for new potential revenue for the satellite companies that manage the airwaves.

On Wednesday, Standard & Poor’s issued an upgrade to the company’s corporate credit rating and affirmed a negative outlook based on a recent buyback program for its Intelsat (Luxembourg) SA 7¾% senior notes due 2021.

The 7¾% notes due 2021 fell about 1¼ points to close at around 94¼ bid. The 8 1/8% notes due 2023 shaved off ¼ point to close at 84½ bid.

On Thursday, the 7¾% notes were level and the 8 1/8% notes gained about ¼ point.

Volume names trade

Norwalk, Conn.-based wireline name Frontier Communications notes closed the week mixed. CFO Perley McBride recently announced his resignation.

The 7 5/8% notes due 2024 picked up about ½ point to close at around 68½ bid. The 10½% notes due 2022 shed about ½ point to close at around 89¼ bid. The 11% notes due 2025 dropped ½ point to close at 78½ bid.

On Thursday, the 7 5/8% notes lost about 1 point, the 10½% notes fell about 1¼ points and the 11% notes dropped about ½ point.

Covington, La.-based oil and gas marine transportation company Hornbeck Offshore Services ended mixed. A recent merger between two companies in the same industry, Tidewater and GulfMark Offshore, has turned investor sentiment negative.

The 5 7/8% notes due 2020 picked up about 2 points to close at around 79 bid. The 5% notes due 2021 were level at 72 bid.

On Thursday, the 5 7/8% notes fell 1½ points and the 5% notes lost about 1 point.

Phoenix-based pet supplies retailer PetSmart paper improved. The company is embroiled in a dispute with its creditors over a recent asset transfer.

The 8 7/8% paper due 2025 gained ¼ point to close at 68¼ bid.

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