Digicel notes jump after exchange offer amended; Neiman Marcus issues drop in debt fight

By James McCandless

San Antonio, Dec. 4 – As equities tanked on Tuesday, the distressed space was mixed in direction.

Digicel Group Ltd.’s notes saw a boost after the company announced amended exchange offers for its 2020 and 2022 bonds.

Sector peer Intelsat SA’s issues were lower.

In retail, Neiman Marcus Group Inc.’s paper traded down amid an ongoing disagreement between the company and creditors about a potential restructuring.

Elsewhere in the space, J.C. Penney Co., Inc.’s notes also declined while PetSmart, Inc.’s issues were mixed.

A rise in oil futures led to improvement for California Resources Corp.’s paper and negative trends for Weatherford International plc and Ensco plc’s notes.

In the natural gas space, Ferrellgas Partners, LP’s issues were mixed.

Digicel higher

Digicel’s notes were moving higher Tuesday, traders said.

The 8¼% notes due 2020 jumped 6¼ points to close at 73 bid. The 7 1/8% notes due 2022 added 2 points to close at 58 bid.

Early Tuesday, the Kingston, Jamaica-based mobile phone service provider announced amended exchange offers for its 2020 and 2022 notes.

The company hopes to swap its 8½% notes due 2020 for up to $580 million in new senior secured notes due 2022.

The debt not exchanged would be given higher standing in the capital structure.

Digicel’s notes have been in distressed territory through the year as the company tries to reckon with its $6.7 billion in debt.

“The company was finally able to put together something that bondholders seemed to like,” a trader said. “They were a major trader today.”

Elsewhere in telecom, Luxembourg-based satellite operator Intelsat’s issues were moving lower.

Intelsat Jackson Holdings SA’s 5½% notes due 2023 lost about ¾ point to close at 88¼ bid. Intelsat (Luxembourg) SA’s fell 2¼ points to close at 81½ bid.

Neiman Marcus down

Meanwhile, Neiman Marcus’ paper gave back some of Monday’s gains, market sources said.

The 8% paper due 2021 dropped 2½ points to close at 50½ bid.

On Monday, the 8% paper rose 3 points.

The Dallas-based luxury retail chain is currently in a dispute with its creditors over a restructuring agreement.

In the center of the dispute this week is the coming private equity transfer of e-commerce arm MyTheresa, which creditors claim would be detrimental in potential collateral talks.

Plano, Texas-based sector peer J.C. Penney’s 8 5/8% notes due 2025 shaved off ¼ point to close at 59 ¼ bid.

Phoenix-based pet supplies name PetSmart’s issues were mixed.

The 8 7/8% notes due 2025 lost 1¼ points to close at 66¾ bid. The 5 7/8% notes due 2025, while rising higher in intraday trading, held level at 77 bid, according to Trace data.

“Every retailer besides Amazon seems to be getting swiped at,” a trader said.”

CalRes gains

In the oil space, Los Angeles-based independent oil and gas producer California Resources’ paper rose with crude futures, traders said.

The 8% paper due 2022 gained 1 point to close at 79½ bid.

Baar, Switzerland-based sector peer Weatherford’s notes fell.

The 8¼% notes due 2023 lost 1¼ points to close at 68¼ bid. The 9 7/8% notes due 2024 dropped 1 point to close at 69 bid.

On Monday, the 8¼% notes and 9 7/8% notes gained 3 points.

News broke early Monday that the company had completed the sale of 11 drilling rigs in Saudi Arabia to ADES International Holding Ltd. for $92.5 million.

London-based contract driller Ensco’s issues trended lower.

The 7.2% notes due 2027 fell 3 points to close at 82 bid. The 7¾% notes due 2026 lost ¾ point to close at 84 bid.

On Tuesday, West Texas Intermediate crude oil futures rose 30 cents, ending the session at $53.25 per barrel. North Sea Brent crude futures were up 39 cents to $62.08 per barrel.

Ferrellgas mixed

As its common stock continued to shed value, Ferrellgas’ paper was mixed, market sources said.

The 6¾% paper due 2022 added 1½ points to close at 85 bid. The 6¾% paper due 2023 lost 1 point to close at 84 bid.

The Overland Park, Kan.-based natural gas name has been under scrutiny after a series of announcements, including the suspension of quarterly cash distributions and the resignations of its chief financial and operating officers.

On Tuesday, its common stock lost 20 percent of its value.

© 2015 Prospect News.
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