BI-LO trades amid ratings downgrades; Community Health continues activity after enlisting help

By James McCandless

San Antonio, March 19 – Traders reported a characteristically slow day in the distressed debt market Monday.

Notes in BI-LO, LLC were active as the company announced a pre-packaged plan of reorganization in Chapter 11 bankruptcy as part of a financial restructuring plan.

Claire’s Stores, Inc. paper became active amid reports that it has filed for bankruptcy and reached a restructuring deal with its creditors.

Issues in Community Health Systems, Inc. continued their activity after news last week that it had hired three firms to help with its debt issues.

Volume favorites in the telecom space were Frontier Communications Corp. and Intelsat SA, both bolstered by recent positive news. Mallinckrodt plc has remained active in the distressed healthcare sector after acquiring an American firm. Revlon, Inc. remained as one of the top distressed retail names to be traded.

BI-LO files for bankruptcy

Traders confirmed increased activity in Jacksonville, Fla.-based supermarket chain BI-LO after it submitted a financial restructuring plan, in which the company will file a pre-packaged plan of reorganization in bankruptcy (see related story elsewhere in this issue).

“Those became super active today,” a trader said.

The 8 5/8% notes due 2018 jumped up about 7¾ points to close at 48 bid.

Claire’s bankrupt

Hoffman Estates, Ill.-based retailer Claire’s issues moved after reports confirmed that the long troubled retailer had filed for bankruptcy Monday and reached a restructuring support agreement with its creditors (see related story elsewhere in this issue).

“This is something that people have been expecting for a few weeks, but it’s the restructuring agreement that was in question for a while,” a trader said.

The 8 7/8% notes due 2019 fell 2¼ points to close at about 12¼ bid.

Community Health trades

Franklin, Tenn.-based hospital operator Community Health Systems began the week actively traded. Last week, reports confirmed that it had enlisted the services of asset management firm Lazard, Citibank and JPMorgan Chase to help manage its debt. The company recently warned stakeholders that it might sell off or close some hospitals in the coming year.

The 7 1/8% issues due 2020 gained about a point to close just above 80½ bid.

Volume favorites active

Norwalk, Conn.-based wireline telecom name Frontier Communications traded again. Recent news that it has scrapped its dividend in favor of focusing on debt has sent notes on a positive trend.

The 7 5/8% notes due 2024 ticked up about ¼ point to close at 59¾ bid. The 10½% notes due 2022 shaved off about 2 points to close at 86¾ bid. The 11% notes due 2025 fell about ½ point to close at 80¼ bid.

Luxembourg-based satellite communications company Intelsat also took up space in the distressed telecom sector.

The Intelsat Jackson SA 5½% issues due 2023 dropped about ¾ point to close at just above 80¾ bid. The 7¼% notes due 2020 fell about 2¾ points to close around 92¼ bid.

Britain-based drug maker Mallinckrodt added to the volume in the distressed healthcare sector.

The 4¾% paper due 2023 fell about 2¾ points to close around 79¼ bid.

New York City-based cosmetics producer Revlon started another week active, having been in high volume since announcing the departure of CEO Fabian Garcia.

The 5¾% notes due 2021 fell 1¼ points to close at 79¾ bid. The 6¼% notes due 2024 gained about 2 points to close just above 68 bid.

“It was a typical Monday,” a trader said. “Nothing happens on a Monday so we don’t know if it is going to be indicative of the rest of the week.

© 2015 Prospect News.
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