Teva rises after starting tender offers; Revlon notes head lower following earnings

By James McCandless

San Antonio, Nov. 8 – The distressed debt market ended the week remaining focused on names that released earnings reports this week.

Teva Pharmaceutical Industries Ltd.’s notes rose as the company kicks off a capped tender offer for two series of notes.

Sector peer Mallinckrodt plc’s issues also improved.

In retail, Revlon, Inc.’s paper was pushed downward following the release of its third-quarter earnings.

Party supplies name Party City Holdco Inc.’s notes continued to crash after its poor showing in the last quarter.

A day after posting underwhelming earnings, LSC Communications, Inc.’s issues fell.

Elsewhere, in telecom, CommScope Holding Co. Inc.’s paper extended a positive run.

Electric utility PG&E Corp.’s notes were flat to higher in the aftermath of showing how its bankruptcy and wildfires weigh on earnings.

A modest rise in oil futures served as the backdrop for gains in Chesapeake Energy Corp.’s issues while McDermott International, Inc.’s paper dipped.

Teva, Mallinckrodt rise

Teva’s notes were on the rise through Friday afternoon, traders said.

The 6¾% senior notes due 2028 improved by ¼ point to close at 92½ bid. The 3.15% senior notes due 2026 gained 1¼ points to close at 78¾ bid.

On Friday, the Petah Tikva, Israel-based generic drug maker announced capped tender offers for $3 billion outstanding 2.2% senior notes due 2021 issued by Teva Pharmaceutical Finance Netherlands III BV, $612,829,000 outstanding 3.65% senior notes due 2021 issued by Teva Pharmaceutical Finance Co. BV and $587.61 million outstanding 3.65% senior notes due 2021, Prospect News reported.

Teva expects to fund the offers with the proceeds from $1.5 billion equivalent of non-callable notes due January 2025.

In its Thursday earnings release, the company showed a profit of 58 cents and revenues of $4.26 billion, both surpassing estimates.

The company also said that it had named Eli Kalif as chief financial officer.

“They talked a lot about how any opioid settlement won’t impact their debt payments,” a trader said. “More people might see that as a reduction of risk.”

Staines-upon-Thames, England-based sector peer Mallinckrodt’s issues improved.

The 5¾% senior notes due 2022 rose ¾ point to close at 29¼ bid. The 5½% senior notes due 2025 added 1 point to close at 27 bid.

Revlon down

In the retail space, Revlon’s paper was pushed downward, market sources said.

The 5¾% senior paper due 2021 fell 2½ points to close at 83 bid. The 6¼% senior paper due 2024 dipped 1 point to close at 51½ bid.

Early Friday, the New York-based cosmetics producer added its report to the week’s list of names showing third-quarter earnings.

The company reported a loss of 71 cents per share, better than the 83 cents per share loss that analysts had expected.

Revenues fell short of expectations at $596.8 million.

After the release of its second-quarter earnings in August, the company hired Goldman Sachs to assist in a strategic alternatives review.

Party City crashes

Party City, another retailer, saw its notes continue to crater, traders said.

The 6 1/8% senior notes due 2023 slid 9¼ points to close at 81¼ bid. The 6 5/8% senior notes due 2026 declined by 10¾ points to close at 70½ bid.

On Thursday, the 6 1/8% notes slid 10¼ points and the 6 5/8% notes crashed 15¼ points.

The drop came after the Elmsford, N.Y.-based party supplies retailer released a disappointing third-quarter earnings report on Thursday.

The company’s loss of 28 cents per share fell short of the 1 cent per share profit predicted by analysts.

Revenues also missed the mark at $540.2 million.

LSC falls

Post-earnings, LSC’s issues fell during the Friday session, market sources said.

The 8¾% senior secured notes due 2023 shed 7¼ points to close at 60¼ bid.

The Chicago-based print services name released its results for the third quarter early Thursday.

The company reported a 6 cents per share loss, missing estimates of an 11 cents per share profit.

Revenues were lagging at $834 million.

CommScope gains

Elsewhere, in the telecom space, CommScope’s paper continued a positive run, traders said.

The 5% senior paper due 2027 improved by 3¼ bid to close at 85¾ bid.

Among the names that released earnings reports on Thursday, the Hickory, N.C.-based communications infrastructure company shined as one of the few to show positive results.

The company’s report was highlighted by a 55 cents per share profit, beating the consensus.

Revenues came in at $2.38 billion.

PG&E flat to higher

Utility PG&E’s notes were flat to higher by the close, market sources said.

The 6.05% notes due 2034 finished level at 104 bid. The 3.3% senior notes due 2027 picked up ½ point to close at 95½ bid.

In the San Francisco-based bankrupt electric utility’s third-quarter earnings release, the market looked past the $1.11 per share profit and $4.43 billion in revenues to focus on the cost of dealing with recent strife.

The company incurred $6.3 billion in after-tax costs stemming from the most recent wildfire and working through its bankruptcy case.

Oil names mixed

Distressed energy tranches saw mixed activity amid modest gains for oil futures, market sources said.

West Texas Intermediate crude oil futures for December delivery rose 9 cents to finish the week at $57.24 per barrel.

North Sea Brent crude oil futures for January delivery settled at $62.51 per barrel after a 22 cent pickup.

Oklahoma City-based independent oil and gas producer Chesapeake Energy’s issues gained.

The 8% senior notes due 2025 added 3¾ points to close at 59½ bid. The 8% senior notes due 2027 improved by 1½ points to close at 56 bid.

Houston-based oil and gas engineering name McDermott’s paper dipped.

The 10 5/8% senior paper due 2024 shed 2 points to close at 11¼ bid.

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