Gulfport notes lower after ratings downgrade; Mallinckrodt eyed on bankruptcy reports

By James McCandless

San Antonio, Oct. 9 – The distressed debt space ended the week with shifting ground in the energy and pharmaceutical spaces.

Gulfport Energy Corp.’s notes were sent lower after the company received a ratings downgrade at the end of Thursday.

The 6 5/8% senior notes due 2023 declined by ¼ point to close at 63¾ bid. The 6% senior notes due 2024 dipped 1 point to close at 63 bid.

After the close on Thursday, the Oklahoma City-based independent oil and gas producer received a ratings downgrade from S&P Global Ratings.

The agency lowered its senior unsecured notes to CCC- from CCC+.

S&P said that the cut reflects its view that the company faces an increased financing risk as a credit facility comes due in the next year, arguing that it would have problems amending and extending the facility.

Meanwhile, pharmaceutical name Mallinckrodt plc’s paper diverged amid reports that the company is nearing a deal for bankruptcy.

The 4¾% senior notes due 2023 were docked 1 point to close at 13 bid. The 10% notes due 2025 gained 1½ points to close at 77 bid.

Late Friday, reports indicated that the Staines-upon-Thames, England-based drug producer is closing in on a deal for a potential bankruptcy filing.

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