Community Health ‘wildly active’ on similar day in Congress; Valeant up across board; retailers drop

By Colin Hanner

Chicago, March 24 – On an otherwise quiet session, Community Health Systems, Inc. was “wildly active” in the distressed market, a trader said, in response to the chaotic unfolding of a health care bill whose vote was shelved for the second-straight day in the House.

“The market was, more or less, sitting on its hands,” a trader said. “Health care was a reason for the market to be on the sidelines, an excuse not to do stuff.”

Activity was more focused on new deals in the high-yield space, the trader said, with new deals from AK Steel Corp., First Quantum Minerals Ltd. and Micron Technology Inc. taking attention from the distressed market.

Yet, the Franklin, Tenn.-based Community Health was up across several issues, as were several other high-yield hospital names, as the likelihood of the American Health Care Act passing in the House looked anything but possible on Friday afternoon, especially when the vote was canceled around 3:30 p.m.

Valeant Pharmaceuticals International Inc. returned to the market as one of the more active names and traded marginally higher across the board. On the week, the company announced it had finalized refinancing transactions.

Distressed retailers saw a few noteworthy trades on the day, particularly from Gymboree Corp. and Claire’s Stores Inc., though Neiman Marcus Group, Inc. saw almost zero activity.

Intelsat Luxembourg Holdings SA was “trading a bit more today,” a trader said, though remained about flat on the day, Avaya Inc. rebounded after a Thursday decline and iHeartCommunications, Inc. continued its quiet spell.

With no vote, hospitals rejoice

With a House vote delayed on Thursday due to a lack of votes garnered for a health care bill, Friday became an ultimatum for Republicans to pass the bill onto the Senate.

President Trump told Congress that if the bill did not pass, the Affordable Care Act, or Obamacare, would stay in place, though as news broke that no vote would take place, there is still much uncertainty surrounding the bill.

Yet, hospitals, particularly Community Health, bought time on the bill’s unpopularity with the withdrawn vote and saw several gains in its issuances on the day, traders said.

Its 6 7/8% notes due 2022 were “wildly active,” a trader said, and one of the most active issues of the day.

The newest deal to come from Community Health – the 6¼% notes due 2023 – were up 5/8 point to par and 7/8, a trader said, and the 5 1/8% notes due 2021 were up 3/8 point to 98 3/8.

Its stock was up 84 cents, or 9.66%, to $9.54.

Other hospital groups, like Tenet Healthcare Corp. and Hospital Corporation of America, were also up on the day, traders said.

Valeant awakes

After a quiet Thursday, Valeant was all up on Friday’s session.

The 6 3/8% notes due 2020 were up ½ point to 88 3/8, a trader said, while the 5 3/8% notes due 2020 were up 3/8 to 87.

In the high-yield space, the 6½% notes due 2022 were up almost 1 to 102 1/8.

The 6¾% notes due 2018 were up ½ point to “par and a half,” a trader said.

And the 7% notes due 2024 were “up a smidge” to 102.

The higher movement may be attributable to the health care bill’s inability to gain support throughout the House, as Trump has repeatedly vowed to lower drug prices, the most recent of which occurred on Wednesday.

“I think we’re going to do it in health care, or we’re going to do it separately, but we’re going to bid down drug prices,” Trump told members of the Congressional Black Caucus on Wednesday, according to media reports.

Also in the pharmaceuticals realm, Endo Pharmaceuticals plc’s 6% notes due 2025 were up 1½ points to 85½, a trader said.

Retail falls

Though Neiman Marcus Group had “almost no volume at all” on Friday, other distressed retailers stepped in with activity of its own.

A trader highlighted San Francisco-based children’s retailer Gymboree’s 9 1/8% notes due 2018, which traded down to 6 today on one trade. The trader added that those notes have not been active as of recent.

And tween and teen retailer Claire’s Stores’ 9% notes due 2018 were quoted at 40½, down from the “plus/minus 41 handle” they carried on Thursday, a trader said.

Avaya rebounds

After a steep loss on Thursday, Santa Clara, Calif.-based telecommunications and business solutions company Avaya’s 10½% notes due 2021 were up around 18, a 3-point upswing from a day prior.

A trader said the 7% notes due 2019 were “inching higher” at 79.

Intelsat active

Though it saw increased activity on the session, Intelsat Luxembourg’s issues saw “nothing really of note, level-wise,” a trader said.

The 7¾% notes due 2021 were unchanged at 60, but very active, a trader said.

And the 8 1/8% notes due 2023 were up 3/8 point to 59½.

iHeart quiet

Volume was not noteworthy on Friday for iHeartCommunications, and movement for at least one issue wasn’t, either.

The 14% notes due 2021 were unchanged at 33¾, while the 9% notes due 2019 were down 3/8 point to 81½.

Market roundup

Gold, copper and silver producer Freeport-McMoRan, Inc.’s 5.4% notes due 2034 were up ½ point to 87¼.

And grocer Fresh Market, Inc.’s 9¾% notes due 2023 were down ¾ point to 81¾.

© 2015 Prospect News.
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