Distressed retail names trade up to end week; Windstream active after loss announcement

By James McCandless

San Antonio, Feb. 23 – The end of the week in the distressed debt market was just as slow as its beginning, traders said, characterizing investors as reluctant to move money around after a long weekend.

Notes in distressed retail companies Sears Holdings Corp., J. C. Penney Co., Inc., and Bon-Ton Stores, Inc. shot up Friday, following reports that competitor Nordstrom, Inc. will move forward with plans to shift from a public to private company.

Another retailer active on Friday was Revlon, Inc., continuing what has become a regular level of high volume trading since parting ways with its chief executive officer.

Windstream Holdings, Inc. paper was active to end the week, the third straight day of high volume trading after announcing fourth quarter losses on Wednesday.

Other distressed telecom companies carrying on in high activity were Frontier Communications Corp. and Intelsat SA. In the healthcare space, Mallinckrodt plc and Community Health Systems, Inc. shored up much of the day’s volume.

Distressed retail jumps

After reports confirmed that Seattle-based high-end retailer Nordstrom would be going forward with a plan to change from a publicly traded name to a private one, a market source said that notes in several distressed retailers followed stocks in trending upward.

“There is usually a lag time between the equity markets and our markets,” a trader said. “I was expecting this to happen next week, but they started moving.”

Hoffman Estates, Ill.-based department store Sears Holdings saw its 6 5/8% notes due 2018 rose about 2 points to close at 80 bid.

Plano, Texas-based retailer J. C. Penney’s 7.4% bonds due 2037 jumped up more than 1½ point to close at about 70 1/8 bid.

Recently bankrupt York, Pa.-based retail name Bon-Ton also saw its paper tick up. The 8% paper due 2021 rose almost a point to close just above 17 bid.

Revlon in high volume

Elsewhere in the retail space, notes in New York City-based cosmetics producer Revlon saw its notes heavily trade on Friday, market sources confirmed. Volume has been high since the exit of CEO Fabian Garcia after a tenure marred with increasing losses in revenue.

The 5¾% notes due 2021 remained level at about 80½ bid. The 6¼% notes due 2024 rose 1 point to close at 69½ bid.

Windstream active

Little Rock, Ark.-based communications solutions name Windstream ended the week on a third day of active trading, a trader said. On Wednesday, the company announced 2017 fourth quarter losses of $1.84 billion, beating analyst expectations.

The 7¾% issues due 2021 traded up 2½ points to close at 75½ bid. The 7½% issues due 2022 rose slightly by ¼ point to close at 68½ bid. The 6 3/8% issues due 2023 lost more than 1 point to close below 59½ bid.

Volume names trade

Distressed telecom names maintained high volume on Friday, market sources confirmed. Norwalk, Conn.-based wireline telecom name Frontier Communications’ paper has become a staple in distressed trading, bolstered by recent news that it had positive changes approved to its credit agreements.

The 6 5/8% paper due 2024 rose ¾ point to close at 62 bid. The 10½% paper due 2022 traded up to 83½ bid. The 11% paper due 2025 rose to 76¾ bid.

Luxembourg-based satellite communications company Intelsat’s 5½% notes due 2023 traded slightly lower but remained level at about 79 bid. The Intelsat Jackson SA 7¼% notes due 2020 fell ½ point to close at 88½ bid.

Since announcing the $1.2 billion acquisition in Rockville, Md.-based medical applications company Sucampo Pharmaceuticals, issues in Britain-based drug maker Mallinckrodt have been in high volume.

The 4¾% issues due 2023 fell almost 2 points to close at about 77½ bid.

Franklin, Tenn.-based hospital operator Community Health Systems saw its paper heavily traded yet level as the week ended. The 7 1/8% paper due 2020 stayed at 86 bid. The 6 7/8% paper due 2022 held at 69 bid.

“We got killed this week,” a trader said. “Not a lot of people are dipping their toes in the water. I hope that is just a symptom of the short week we had but we need to see how next week starts.”

© 2015 Prospect News.
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