California Resources notes lower as oil prices recover; Digicel issues rise after exchange extended

By James McCandless

San Antonio, Dec. 19 – The distressed space spread its volume across multiple sectors on Wednesday after concentrating on energy this week.

California Resources Corp.’s notes continued to lead trading, ending the day lower as oil prices saw an improvement.

The recovery saw concurrent improvement for Sanchez Energy Corp.’s issues while Weatherford International plc and Diamond Offshore Drilling, Inc.’s paper declined.

Elsewhere, Digicel Group Ltd.’s notes gained after the company announced an extension for its exchange offer of its 8¼% notes due 2020.

Sector peer Intelsat SA’s issues were mixed.

Drug maker Bausch Health Cos. Inc.’s paper fell despite offering an update on its debt repayment for the year.

Mallinckrodt plc’s notes also took a dive.

In the tech space, Western Digital Corp.’s issues went negative.

CalRes down

California Resources’ notes were declined, traders said.

The 6% notes due 2024 dropped 3½ points to close at 60 bid. The 8% notes due 2022 fell 1¼ points to close at 68½ bid.

The Los Angeles-based independent oil and gas producer’s notes, usually the standard bearer for distressed energy names, were down despite a slight gain in crude futures on Wednesday.

Houston-based sector peer Sanchez Energy’s issues followed futures upward.

The 6 1/8% notes due 2023 picked up 1¼ points to close at 19½ bid.

Baar, Switzerland-based oilfield services provider Weatherford’s paper was seen declining in the Wednesday session.

The 8¼% paper due 2023 lost ¾ point to close at 63½ bid. The 97/8% paper due 2024 shed 1 point to close at 63½ bid.

Houston-based contract driller Diamond Offshore’s 3.45% notes due 2023 declined by 1½ points to close at 78 bid.

West Texas Intermediate crude oil futures for January delivery gained 96 cents, closing the session at $47.20 per barrel.

Brent North Sea crude rose 98 cents to close at $57.24 per barrel.

Digicel up

Elsewhere, Digicel’s issues were rising in Wednesday trading, market sources said.

The 8¼% notes due 2020 added ¾ point to close at 66 bid. The 6¾% notes due 2023 gained 1¼ points to close at 79 bid.

On Wednesday, the Kingston, Jamaica-based cell phone service provider announced that it would be extending its exchange offer for the 8¼% notes to 11:59 p.m. ET on Dec. 21.

The company reported that it had received tenders of $1,893,688,000, or 94.7%, of the $2 billion outstanding, Prospect News reported.

The offer had been extended several times since the original offering commenced on Sept. 14.

“Looks like they finally got their holders to budge,” a trader said.

Meanwhile, Luxembourg-based satellite operator Intelsat’s paper was mixed.

Intelsat Jackson Holdings SA’s 5½% paper due 2023 shaved off ¼ point to close at 87½ bid. Intelsat (Luxembourg) SA’s 8 1/8% paper due 2023 added ½ point to close at 79¼ bid.

Bausch falls

Bausch’s notes were in decline, traders said.

The 6 1/8% notes due 2025 lost 4½ points to close at 88¾ bid.

On Wednesday, the Laval, Canada-based pharmaceutical company formerly known as Valeant until July, said that it plans to pay down another $76 million of its senior secured term loans the week of Dec. 24, Prospect News reported.

The company also said that it had repaid about $400 million of its debt in the fourth quarter.

Last week, it announced that it would be purchasing bankrupt Synergy Pharmaceuticals for $200 million.

Staines-Upon-Thames, U.K.-based drug maker Mallinckrodt’s issues saw a drop.

The 4¾% notes due 2023 fell 4 points to close at 66¼ bid.

Western Digital loses

Western Digital’s paper was negative, market sources said.

The 4¾% paper due 2026 lost 1 point to close at 88 bid.

The San Jose, Calif.-based data storage name has been under pressure after missing earnings and revenue estimates for the first quarter in Oct.

“This one’s been getting killed lately,” a trader said. “There’s a lot of negativity in a lot of names that deal with semiconductors.”

© 2015 Prospect News.
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