Whiting lower after financial adviser report; Endo, Mallinckrodt lifted in pharma space

By James McCandless

San Antonio, Feb. 12 – The distressed debt space saw attention fixed on the energy and pharma sectors on Wednesday.

Whiting Petroleum Corp.’s notes shifted lower after reports that the company has consulted financial advisers on its debt.

Despite oil futures improving, California Resources Corp.’s and Antero Resources Corp.’s issues varied while Oasis Petroleum Inc.’s paper slipped.

On a day of positive news in the pharma space, Endo International plc’s and Mallinckrodt plc’s notes were lifted.

Meanwhile, tobacco name Pyxus International, Inc.’s issues continued to see negativity in the wake of a third-quarter earnings loss.

In telecom, satellite company Intelsat SA’s paper was under water as sector peer Frontier Communications Corp.’s notes diverged.

Whiting lower

Whiting Petroleum’s notes shifted lower by the close, traders said.

The 6¼% senior notes due 2023 dropped 4¼ points to close at 64½ bid. The 6 5/8% senior notes due 2026 lost 2 points to close at 54 bid.

The Denver-based independent oil and gas producer saw negativity throughout its structure after reports indicated that the company has consulted with financial advisers on ways to refinance as it faces a large amount of debt coming due in the short term.

According to Bloomberg, the company is considering a replacement of unsecured debt with newly issued secured debt.

“Refinancing could be a hard sell, considering the low energy prices,” a trader said. “Where natural gas is at might be a point of contention.”

Over the last year, a string of over-levered energy names have sought restructuring deals in the face of weak energy prices.

Oil names vary

Distressed energy names saw varying movements with improving oil futures as the backdrop, market sources said.

West Texas Intermediate crude oil futures for March delivery garnered $1.23 to end the day at $51.17 per barrel.

North Sea Brent crude oil futures for April delivery settled at $55.79 per barrel after a $1.78 pickup.

Los Angeles-based producer California Resources’ issues varied in direction.

The 6% senior notes due 2022 shed 1½ points to close at 24½ bid. The 8% senior secured notes due 2022 gained 1 point to close at 32¼ bid.

Antero Resources, another Denver-based producer, saw mixed results for its paper.

The 5 1/8% senior paper due 2022 held level at 84½ bid. The 5% senior paper due 2025 shaved off ¼ point to close at 62½ bid.

Houston-based peer Oasis Petroleum’s notes slipped.

The 6¼% senior notes due 2026 fell ¼ point to close at 72½ bid.

Endo, Mallinckrodt lifted

On a positive day in the pharma space, Endo’s issues were lifted, traders said.

The 5 3/8% senior notes due 2023 shot up 4 points to close at 80 bid. The 6% senior notes due 2025 improved by 3 points to close at 76¾ bid.

The Dublin-based generic drug producer’s tranches, along with others in distressed territory, saw a day of positivity after a major player in the sector released a positive earnings report.

Petach Tikva, Israel-based drug name Teva Pharmaceutical Industries Ltd. reported a 62 cents per share profit that was in line with analyst expectations and $4.47 billion in revenue that outpaced predictions.

“There was a lot of carryover into the rest of the space,” a trader said.

Movement in pharma names has been largely negative as the industry grapples with a myriad litigation related to the opioid epidemic.

Dublin-based sector peer Mallinckrodt’s paper also gained ground.

The 5¾% senior notes due 2022 rose 3 points to close at 53½ bid. The 5 5/8% senior paper due 2023 were better by 1¾ points to close at 44½ bid.

Pyxus negative

Meanwhile, Pyxus International’s notes continued a negative trend, market sources said.

The 9 7/8% notes due 2021 dived 6¼ points to close at 48¼ bid.

On Tuesday, the notes declined by 2¾ points.

The Morrisville, N.C.-based tobacco products producer’s notes have seen two negative trading days in the aftermath of its third-quarter earnings report.

An earnings loss of $2.40 per share was the highlight, well under the 56 cents per share profit from that period last year.

Revenue also underperformed at $363.3 million.

Intelsat down

In the telecom space, Intelsat’s issues were under water, traders said.

Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 were docked 1 point to close at 48¼ bid. The 9½% senior notes due 2023 dipped ¼ point to close at 69¼ bid.

The Luxembourg-based satellite operator’s issues have been trending upward after striking a deal with the Federal Communications Commission on revenue from a C-band spectrum auction.

In a plan released last week for an auction slated for December, the company stands to receive around $4.85 billion in revenue.

Norwalk, Conn.-based wireline communicator Frontier’s paper diverged.

The 10½% paper due 2022 garnered ¾ point to close at 47½ bid. The 11% senior paper due 2025 shed ½ point to close at 47½ bid.

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