Talen notes higher; Moss Creek, Summit, PBF decline; Nordstrom drops; Endo softens

By Cristal Cody

Tupelo, Miss., Nov. 24 – Distressed energy bonds mostly declined in light pre-Thanksgiving Day trading on Wednesday.

Talen Energy Supply LLC’s bonds clawed back losses from the start of the week with the paper trading about 2½ points to 4 points better on the day.

Moss Creek Resources Holdings Inc.’s 7½% senior notes due 2026 (Caa1/B) declined nearly 2 points.

The Woodlands, Tex.-based Summit Midstream Partners, LP’s 5¾% notes due 2025 (Caa2/C) dipped over 1½ points to the 88 bid range with $1.4 million of paper changing hands on Wednesday, a source said.

PBF Holding Co. LLC’s bonds also were lower in thin volume.

Oil was modestly weaker after prices revved up on Tuesday following president Joe Biden’s announcement of the release of 50 million barrels of oil from reserves to help lower gas prices.

West Texas Intermediate crude oil benchmark futures for January deliveries settled off 11 cents at $78.39 a barrel after climbing $1.75 on Tuesday.

Market tone was mixed as desks thinned ahead of Thursday’s holiday.

The iShares iBoxx High Yield Corporate Bond ETF dipped 2 cents to $86.09.

In other secondary action, Nordstrom, Inc.’s bonds dropped 2¾ points to over 3½ points, while its stock plunged nearly 30% after the luxury retailer missed third-quarter earnings expectations.

Looking at distressed opioid names, Endo International plc’s 6% notes fell about ¾ point.

Mallinckrodt plc’s 5¾% senior notes improved ¼ point.

Talen bonds recover

Talen Energy’s notes saw gains on Wednesday after sliding about 5½ points to 9 points on Monday and mostly softening on Tuesday, a source said.

Talen’s 7¼% senior secured notes due 2027 (Ba3/B+/B+) rose over 2½ points to 94¼ bid on $2 million of secondary volume.

Talen’s 10½% senior notes due 2026 (Caa1/CCC/B-) traded 4 points higher on Wednesday afternoon at 60½ bid on over $2.5 million of volume.

The issue had traded on Tuesday 4 points higher at 59¾ bid before sliding at the last trade to 56½ bid.

The Woodlands, Tex., and Allentown, Pa.-based power company is scheduled to hold its third-quarter conference call on Dec. 2.

Moss Creek lower

Moss Creek Resources Holdings’ 7½% senior notes due 2026 (Caa1/B) fell nearly 2 points to the 88 bid area by late in the day, a source said.

The issue saw over $2 million of volume.

The Houston-based oil and gas exploration company is owned by parent company Surge Energy US Holdings Co.

PBF softens

PBF Holding’s 7¼% notes due 2025 (Caa1/B/B-) traded about 1½ points softer on Wednesday at the 72¾ bid area in thin supply, a source said.

The Parsippany, N.J.-based petroleum refiner’s 6% senior notes due 2028 (Caa1/B/B-) also fell about ¾ point to 66 bid over the day.

Nordstrom down

Nordstrom’s notes traded 2¾ points to over 3½ points weaker on Wednesday as its stock plunged nearly 30%, a source said.

The company’s 5% senior notes due 2044 (Ba1/BB+/BBB-) declined 2¾ points to 96 bid on over $19.5 million of secondary supply.

The Seattle-based retailer’s shares closed Wednesday down 29.03% at $22.66.

Nordstrom released its third-quarter earnings report after the markets closed on Tuesday.

Endo dips

Opioid-related names were mixed in light secondary action on Wednesday, a source said.

Endo Finance LLC’s 6% senior notes due 2028 (Caa3/CCC-) fell about ¾ point by Wednesday afternoon to 76¼ bid.

The notes declined about ¼ point on Tuesday after trading down ¾ point on Monday.

The issue is up about 7 points since the end of October.

The Dublin-based pharmaceutical maker’s bonds improved in November after a California state trial ruled that its subsidiaries are not liable for opioid-related claims.

Mallinckrodt’s bonds were flat to higher on the day.

The 5¾% senior notes rose ¼ point to 57¾ bid.

The Dublin- and St. Louis-based bankrupt pharmaceutical maker’s notes have climbed about 15 points month to date.

Distressed returns improve

Distressed index returns improved on Tuesday from the start of the week.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return was minus 0.36% on Tuesday, compared to minus 0.59% on Monday.

Month-to-date total returns remained weak at minus 3.73% versus minus 3.38% over the first session of the week.

Year-to-date total returns softened to 24.21% from 24.66% on Monday.

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