Lull hits distressed markets; iHeartMedia down several points; energy mixed on oil future rise

By Colin Hanner

Chicago, Dec. 16 – The holiday lull seemed to be in swing in the distressed markets on the last session of the week on Friday, as traders said there were no substantial movers in either direction.

“I’m stressing to find things that went on” in the distressed markets, a trader said, adding that focus in the high-yield arena was on new issue Tesoro Corp.

iHeartMedia Inc.’s most-active distressed notes were trading down “a good bit,” a trader said, capping off a week where the radio company decided not to repay $57.1 million of its 5½% senior notes due 2016.

In the exploration and production sector, oil futures rose on the day and brought at least one sector-specific name up with them, though activity was rather muted.

California Resources Corp. saw a modest point gain, but Stone Energy Corp., which announced it made a pre-packaged Chapter 11 bankruptcy filing on Wednesday, was down, albeit marginally.

Valeant Pharmaceuticals International Inc., mixed after increased-volume trading on Thursday, was down for the second-straight session.

iHeart down

iHeart’s 14% notes due 2021 were down 1½ points to 39 1/8, a trader said, adding that they were very active.

Another trader said the notes traded down “a good bit” to 39 from a previous handle of 41½, a 2½-point downswing.

The 10% notes due 2018 were trading off 2 points to 68 from 70, a trader said, while another trader quoted the notes down 1¾ point to a 68½ handle.

In energy

California Resources’ 8% notes due 2022 were up “almost a point,” a trader said, finishing at 88 7/8.

“It seemed like they were pretty active,” a trader said.

A market source said the notes were up ½ point to 89.

Northern Oil and Gas, Inc., whose activity surprised a trader by defying its usually-dormant state, saw a 1½-point upswing in its 8% notes due 2020, which settled with an 82½ handle.

On the flip side, MEG Energy Corp.’s 7% notes due 2024 were down 1½ points to 91¼, a market source said.

Houston-based Parker Drilling Co.’s 6¾% notes due 2022 were unchanged at 87.

Stone down after restructuring

Nearing $2 billion in total debt, Stone Energy filed a pre-packaged Chapter 11 bankruptcy filing Wednesday in the U.S. Bankruptcy Court for the Southern District of Texas in accordance with its previously announced comprehensive balance sheet restructuring efforts.

Moody’s Investors Service downgraded Stone’s probability of default rating to D-PD from Ca-PD on Friday.

Stone’s 7½% notes due 2022 were down 1 point to 56¾, a market source said.

Healthcare mixed

On Thursday, Valeant Pharmaceuticals’ chief executive officer Joe Papa said that if there was interest for the Canadian-based pharmaceutical company’s core business, he would take it into consideration “at this time.” That provided a brief rise in notes that afternoon, and movement was mixed on the day.

One of Valeant’s notes, the 5 7/8% notes due 2023 was down ¾ point to 74 on Thursday, a trader said.

Elsewhere in pharmaceuticals, Concordia International Corp.’s 7% notes due 2023 were up ¼ point to 31 on one trade, a trader said, and the 9½% notes due 2022 were up 1 point to 35½ on similar-volume trading.

Hospital operator Community Health Systems Inc.’s 6 7/8% notes due 2022 were down 1/8 point to 68 5/8, a trader said, and the 8% notes due 2019 were down ¼ point to 82.

A mixed bag

Syniverse Holdings, Inc.’s 9 1/8% notes due 2019 were up ¾ point to 87½, a trader said.

On Dec. 9, Syniverse announced the launch of a private exchange offer for its outstanding 9 1/8% notes. Noteholders may exchange up to $364 million of its $475 million of the outstanding notes.

Intelsat Jackson Holdings SA’s 7¼% notes due 2020 was unchanged at 77½, a trader said.

Northbrook, Ill.-based CF Industries Holdings Inc.’s 5.15% notes due 2034 was up ½ point to 85.

Neiman Marcus Group, Inc., off the heels of disappointing first quarter results earlier in the week, saw a ½-point uptick in its 8¾% notes due 2021 to finish with a 71½ handle.

And grocery store chain The Fresh Market Inc., which a trader said he “does not see often” was down 1¼ point in its 9¾% notes due 2023 on a “half-dozen trades.”

Caroline Salls contributed to this review

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