Endo, Teva drop post-settlement news; Range Resources active, flat after downgrade

By James McCandless

San Antonio, Aug. 27 – The distressed debt market saw a renewed focus on tranches in the pharmaceutical and energy sectors on Tuesday.

Pharma names Endo International plc’s and Teva Pharmaceutical Industries Ltd.’s notes dropped in the wake of a high-profile opioid lawsuit judgment.

Sector peer Mallinckrodt plc’s issues also saw negativity.

Meanwhile, in energy, Range Resources Corp.’s distressed paper was active but largely unchanged following a ratings agency downgrade.

Despite rising oil futures, California Resources Corp.’s and Whiting Petroleum Corp.’s notes were both under pressure.

REIT CBL & Associates Properties, Inc.’s issues dipped after an activist investor disclosed a 6% stake in the name.

Elsewhere, GTT Communications, Inc.’s paper fell as its chief financial officer prepares to leave the position.

Wireline name Frontier Communications Corp.’s notes followed the negative trend.

Pharma space drops

In the wake of a high-profile opioid lawsuit settlement order, distressed pharmaceutical tranches all dropped, traders said.

Endo’s 6% senior notes due 2025 fell 3¼ points to close at 63½ bid. The Par Pharmaceutical Cos. Inc. 7½% senior secured notes due 2027 declined 1½ points to close at 93 bid.

Dublin-based drug producer Endo’s capital structure was among the most active in distressed trading a day after an Oklahoma judge ordered sector peer Johnson & Johnson to pay $572 million in opioid-related damages to the state.

Although the company plans to appeal the decision, the market spent Tuesday debating what future litigation may cost the industry.

In a note, an analyst at Susquehanna Financial said that the total across the country could reach $37 billion.

“This is what’s keeping the sector so active and topical,” a trader said. “There’s a lot of talk on who could be the most exposed.”

Petach Tikva, Israel-based generics maker Teva’s issues were also trending lower.

The 2.8% senior notes due 2023 held level at 84 bid. The 3.15% senior notes due 2026 lost 1½ points to close at 73 bid.

Staines-upon-Thames, England-based peer Mallinckrodt’s paper followed suit.

The 4¾% senior notes due 2023 dipped 2 points to close at 51 bid.

Range unchanged

Meanwhile, in energy, Range Resources’ distressed notes were active but unchanged, market sources said.

The 4 7/8% senior notes due 2025, while moving as low as 81 bid during the day, ended level at 82 bid. The 5% senior notes due 2023 ended at 88½ bid.

On Tuesday, S&P Global Ratings issued a downgrade for the Fort Worth-based natural gas producer.

The agency lowered its unsecured issue-level ratings to BB from BB+, citing an assumption for lower prices for natural gas and natural gas liquids.

S&P also sees the company’s credit metrics as weaker than expected through 2020.

Oil names down

Despite gains for oil futures, distressed energy names were under pressure, traders said.

Los Angeles-based independent oil and gas producer California Resources’ issues were pushed under.

The 8% senior secured notes due 2022 shaved off ½ point to close at 57¾ bid.

Denver-based oil and gas producer Whiting’s paper was also under water.

The 6¼% senior paper due 2023 declined by ¾ point to close at 79½ bid. The 6 5/8% senior paper due 2026 fell 1 point to close at 73½ bid.

West Texas Intermediate crude oil futures for October delivery shot up $1.29 to settle the day at $54.93.

North Sea Brent crude oil futures for October delivery finished at $59.51 after tacking on 81 cents.

CBL dips

CBL’s notes saw a sustained dip in the Tuesday session, market sources said.

The 5¼% senior notes due 2023 lopped off ½ point to close at 64 bid. The 4.6% senior notes due 2024 gave back ¾ point to close at 63¼ bid.

In a Monday disclosure with the Securities and Exchange Commission, Exeter Capital said that it had purchased a 6% stake in the Chattanooga, Tenn.-based real estate investment trust, calling the name “undervalued.”

“They will inevitably begin putting pressure on management to turn around performance,” a trader said.

The company’s debt has seen higher trading since the company announced a partial stake sale of property for $27.75 million and a potential stock split last week.

GTT, Frontier fall

Elsewhere, GTT’s issues fell during the day’s activity, traders said.

The 7 7/8% senior notes due 2024 slashed 3¾ points to close at 60 bid.

The McLean, Va.-based cloud networking services provider announced early Tuesday that CFO Michael Sicoli would be leaving the position on Sept. 30, promising to remain a shareholder.

In its most recent earnings report, the company failed to meet analyst expectations.

Wireline communications name Frontier’s paper was also weaker.

The 10½% senior notes due 2022 lost ¾ point to close at 51¾ bid. The 11% senior notes due 2025 shaved off ¼ point to close at 50½ bid.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.