Energy Future pares losses from Friday’s session; Community Health sees small loss; Hertz down with auto industry

By Colin Hanner

Chicago, April 3 – It was a lackluster session in the distressed market on Monday, traders said, with volume light and trading tight across only a few notable issues.

“It was a sleepy day,” a trader said, adding that in the regular high-yield a new issue out of Videotron Ltd. wasn’t “all that active, relatively speaking.”

“There was nothing to get your hands on, action-wise,” the trader said. “It was certainly an uninspiring market today.”

Yet, one issue stood out among the rest for its swinging movement in the distressed arena as of late.

“The name de jour for the past few sessions has been [Energy Future Holdings Corp.],” the trader said.

Energy Future gained several points in its distressed issue a session following a downturn caused by the blocked approval of an acquisition with NextEra Energy Inc., a Juno Beach, Fla.-based nuclear electric power generation company.

Nearing the top of the pack, Community Health Systems Inc. was down marginally on “a dozen trades,” a trader said.

Valeant Pharmaceuticals International Inc. traded in the same ballpark on similar volume.

As the auto industry accounted for some of the biggest losses in the Dow Jones Industrial Average for the session, Hertz Global Holdings, Inc. was down a round number, with a trader adding that “used car sales are having some hard times.”

Two retailers – J. Crew Group Inc. and Neiman Marcus Group Inc. – were down similarly, and movement in the exploration and production sector was mixed.

Energy Future gets back

Energy Future’s 11¼% notes due 2017 were up 1½ to 2 points to 31, a trader said on Monday, just one session after the notes had been trading in the mid-20s during intraday activity.

Late Thursday, Reuters reported that Texas regulators nixed NextEra Energy Inc’s acquisition of the company – the second time Oncor, a company in which Energy Future holds a majority ownership, has been met with a blockade from regulators – because it would have placed too much risk on ratepayers.

Emerging from a three-year bankruptcy may have to be completely rewritten, including a plan of reorganization that had included a planned sale to NextEra Energy, sources in the Reuters story said.

In health and pharma

Franklin, Tenn.-based Community Health Systems’ 6 7/8% notes due 2022 were down 1/8 point to 86 3/8, a trader said, which followed a ¼-point loss on Friday’s session.

And in pharmaceuticals, Valeant International’s 6 1/8% notes due 2025 were down ¾ point on “a bunch of trades” to 76¼.

With auto down, so goes Hertz

Ford Motor Co., General Motor Co. and Fiat Chrysler Automobiles NV’s downturn in the equity market on Monday, the first day of the quarter, may be a harbinger of things to come for the auto industry, and on Monday it seemed to have affected rental car agency Hertz Global.

Hertz, which also operates a used car sales division, saw a 1-point decline in its 5% notes due 2024, which finished at 86 3/8, a trader said.

Retailers up

Neiman Marcus stayed active on Monday, the third such consecutive session of gains in its distressed notes.

A trader said the 8% notes due 2021 were up ¼ point to 60¾.

And J. Crew Group’s 7¾% notes due 2019 were down ¼ point to 45 on “a couple of trades,” a trader said.

E&P mixed

Oil and natural gas had a more hushed tone on Monday after the weekend break after a stretch of resurgent sessions for oil prices had distressed companies capitalizing for the better part of last week.

On Monday, California Resources Corp. 8% notes due 2022 were down 1/8 point to 81¼.

And Luxembourg-based offshore driller Pacific Drilling Co.’s 7¼% notes due 2017 were up 2¼ points to 57.

Distressed roundup

Leading one-offs, Frontier Communications Corp.’s 7 1/8% notes due 2023 were down 1/8 point to 87½.

From there, volume fell off substantially, a trader said.

Satellite telecommunications company Intelsat Luxembourg Holdings SA’s 8% notes due 2018 were down ¾ point to 60¼, while the 7¾% notes due 2021 were unchanged at 60.

And iHeartCommunications, Inc.’s 9% notes due 2022 were up 1/8 point to 75 5/8.

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