Uniti Group bonds weaken as company posts earnings; Party City crashes after Q4 miss

By James McCandless

San Antonio, March 12 – Compounding losses hit the distressed debt space, hitting heaviest in the energy sector.

Uniti Group Inc.’s notes dropped in anticipation of the company’s after-market earnings release, which yielded mixed results.

Meanwhile, in retail, Party City Holdco Inc.’s issues crashed after reporting disappointing fourth-quarter results and a new chief executive officer.

Sector peer Revlon, Inc.’s paper was also seen trailing.

Worries about supply and new travel restrictions hobbled oil futures, knocking down Antero Resources Corp.’s, Whiting Petroleum Corp.’s and Range Resources Corp.’s notes.

In the telecom space, Frontier Communications Corp.’s issues slid as the market reacts to the possibility of a bankruptcy filing.

Satellite operator Intelsat SA’s paper was similarly weaker.

Elsewhere, PG&E Corp.’s notes declined in the utilities space.

Uniti drops

Uniti Group’s notes dropped with the rest of the market, traders said.

The 7 7/8% senior notes due 2025 shed 4 points to close at 97½ bid. The 8¼% senior notes due 2023 declined by 8½ points to close at 79 bid.

The 7 7/8% notes saw about $24 million change hands.

The Little Rock, Ark.-based real estate investment trust’s structure was active and negative in the run-up to the company’s release of its fourth-quarter earnings after the market close.

The company reported a profit of 48 cents per share, better than the profit of 38 cents per share expected by analysts.

Revenues came in at $268.5 million, narrower than the consensus prediction.

Last week, the company reached a settlement with large customer Windstream over a number of issues, most notably a rent payment schedule.

Party City, Revlon down

Meanwhile, in retail, Party City’s notes crashed on Thursday, market sources said.

The 6 5/8% senior notes due 2026 dived 20 points to close at 31 bid.

Early Thursday morning, the Elmsford, N.Y.-based retailer reported disappointing results for the fourth quarter.

The company showed a profit of 51 cents per share, below analyst predictions of an 88 cents per share profit.

Revenues were reported as weaker than expected at $731.6 million.

Concurrently, the company announced that CEO Jim Harrison would resign from his position to become vice chairman of the board of directors.

Taking his place would be company executive Brad Weston.

“The stock was chopped in half,” a trader said. “The circumstances surrounding all of this didn’t exactly help it.”

Party City was hit with weakness in the last half of 2019, placing the blame on weakness in the retail sector and a helium shortage.

New York-based cosmetics name Revlon’s paper was seen trailing.

The 5¾% senior paper due 2021 shed 4¾ points to close at 87¾ bid. The 6¼% senior notes due 2024 shaved off ¾ point to close at 36½ bid.

Oil dips

Hobbled oil futures contributed to losses in distressed energy tranches, traders said.

A combination of cheap crude entering the market and new travel restrictions led to further declines in oil futures.

West Texas Intermediate crude oil futures for April delivery chopped off $1.48 to settle at $31.50 per barrel.

North Sea Brent crude oil futures for May delivery finished at $33.22 per barrel after a $2.57 drop.

Denver-based independent oil and gas producer Antero Resources’ notes were knocked down.

The 5 1/8% senior notes due 2022 lost 1 point to close at 48 bid. The 5 5/8% senior notes due 2023 dived 8 points to close at 34 bid.

Whiting Petroleum, another Denver-based producer, saw its issues follow the trend.

The 6¼% senior notes due 2023 dipped 5 points to close at 11 bid. The 6 5/8% senior notes due 2026 lopped off 2½ points to close at 13½ bid.

Fort Worth-based peer Range Resources’ paper was also negative.

The 9¼% senior notes due 2026 crashed 17 points to close at 42 bid.

Frontier, Intelsat slide

In the telecom space, Frontier’s notes slid to lower levels, market sources said.

The 10½% senior notes due 2022 slipped 2½ points to close at 34½ bid. The 11% senior notes due 2025 shed 6¼ points to close at 29¾ bid.

The moves came two days after news reports indicated that the company is preparing to skip a coupon payment that is due March 15.

In doing so, the company has entered talks with creditors in order to hammer out a restructuring plan that would include a Chapter 11 bankruptcy filing.

“They have to focus on debt reduction,” a trader said. “With the way this year is looking that’s got to be the main goal.”

Luxembourg-based satellite operator Intelsat’s issues were similarly weaker.

Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 were pushed down 6 points to close at 27 bid. Intelsat Jackson Holdings SA’s 5½% senior notes due 2023 lost 3½ points to close at 74½ bid.

PG&E declines

Elsewhere, utilities company PG&E’s paper declined, traders said.

The 6.05% notes due 2034 dropped 3½ points to close at 111½ bid.

The San Francisco-based bankrupt electric utility has seen volatile trading this week, anchored on Tuesday’s news that the company has reached a settlement with federal and state emergency management agencies.

With the Federal Emergency Management Agency, the company settled agency claims for $1 billion in the name of making sure wildfire victims are prioritized in payouts.

California’s agency agreed to drop its claims.

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