Neiman Marcus notes up despite creditor lawsuit; Altice lower after ratings downgrade

By James McCandless

San Antonio, Dec. 10 – The distressed space started another week relatively quietly, but it was volatile.

Neiman Marcus Group Inc.’s notes were higher despite news Monday that a creditor had filed a lawsuit against the company over a private equity transfer.

Elsewhere in retail, PetSmart, Inc.’s issues declined.

In the telecom space, Altice SA’s paper fell after receiving ratings downgrades late Friday.

Meanwhile, Intelsat SA’s notes rose while Frontier Communications Corp.’s issues ended mixed.

Negativity in oil futures led to losses for California Resources Corp.’s and Hi-Crush Partners LP’s paper, while Ensco plc’s notes were mixed.

Mallinckrodt plc’s issues fell further as the market continued to react to the company’s planned spinoff of its generic drug business.

Neiman Marcus up, PetSmart down

Neiman Marcus’ notes were rising Monday, traders said.

The 8% notes due 2021 picked up ¼ point to close at 48¼ bid. The 7 1/8% notes due 2028 gained ¾ point to close at 71 bid.

On Monday, news broke that Marble Ridge Capital, a major creditor, has filed a lawsuit against the Dallas-based luxury retailer to force the reversal of the private equity transfer of e-commerce segment MyTheresa.

The transfer became the center of now-halted negotiations over a potential debt restructuring, with creditors claiming that MyTheresa would be worth $1 billion in collateral.

“They’ve got some time to work something out before a large portion of their debt matures,” a trader said.

Elsewhere in retail, Phoenix-based pet supplies retailer PetSmart’s issues declined.

The 8 7/8% notes due 2025 dropped 1 point to close at 65¼ bid. The 5 7/8% notes due 2025 shaved off ¼ point to close at 75¾ bid.

Altice lower

Meanwhile, Altice’s paper was moving lower, market sources said.

The 7 5/8% paper due 2025 lost 1¾ points to close at 78½ bid.

Late Friday, Moody’s Investors Service downgraded the corporate family ratings and probability of default ratings of Altice Luxembourg SA, Altice France SA and Altice International Sarl.

There was also a rash of issue-level downgrades.

Recently, the Amsterdam-based telecom company sold a 49.99% stake in its French fiber optics arm for $2.05 billion to three buyers.

The notes have been under pressure since a recent earnings report yielded mixed results, specifically in showing little progress in the company’s debt reduction but also reporting a growing French subscriber base.

Luxembourg-based sector peer Intelsat’s notes rose in the Monday session.

Intelsat Jackson Holdings SA’s 5½% notes due 2023 added ¼ point to close at 87¾ bid. Intelsat (Luxembourg) SA’s 8 1/8% notes due 2023 gained ½ point to close at 80 bid.

Norwalk, Conn.-based wireline telecom name Frontier’s issues were mixed.

The 7 5/8% notes due 2024 went up 1¼ points to close at 56¾ bid. The 10½% notes due 2022 dropped 1½ points to close at 75½ bid. The 11% notes due 2025 lost 2 points to close at 66½ bid.

Oil takes a beating

Declining oil futures led to similar movement in California Resources’ paper, traders said.

The 6% paper due 2024 lost 2¼ points to close at 69 bid. The 8% paper due 2022 traded down 4½ points to close at 73 bid.

The Los Angeles-based independent oil and gas producer’s bellwether paper has been tracking oil futures’ movements.

“A lot of distressed stuff was relatively quiet, with oil being the exception,” a trader said. “A lot of the popular names have been taking a beating.”

Houston-based energy logistics solutions name Hi-Crush’s 9½% notes due 2026 fell 1 point to close at 79½ bid.

London-based contract driller Ensco’s issues were mixed.

The 7.2% notes due 2027 added ¾ point to close at 80 bid. The 7¾% notes due 2026 lost 1½ points to close at 81 bid.

At the end of the Monday session, West Texas Intermediate crude oil futures lost $1.61 to settle at $51 per barrel. North Sea Brent crude lost $1.70, closing at $59.97 per barrel.

Mallinckrodt down

Mallinckrodt’s paper continued to fall, market sources said.

The 4¾% paper due 2023 dropped 1 point to close at 74 bid.

On Thursday, the Staines-Upon-Thames, U.K.-based drug maker announced that it would be spinning off its generic drug business to its shareholders in the second half of 2019.

The company also said that it would be interested in selling the segment before the spin off could be completed.

Moody’s Investors Service said on Friday that the proposed spinoff would be credit negative.

“It’s a bit of a surprise,” a trader said. “Maybe they’re trying to entice a buyer who won’t budge.”

© 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.