Endo, Mallinckrodt notes better on settlement news; DISH rises after analyst upgrade

By James McCandless

San Antonio, Aug. 26 – The distressed debt space started a new week with a focus on newsmakers and carryovers from the prior week, with tranches skewing positive.

Endo International plc’s and Mallinckrodt plc’s notes both ended better after sector peer Johnson & Johnson was ordered to pay a multi-million dollar opioid lawsuit settlement.

In telecom, DISH Network Corp.’s paper rose after receiving an analyst upgrade early Monday.

Sector peer Frontier Communications Corp.’s notes also trended positively.

Retailer L Brands, Inc.’s notes saw a partial recovery after receiving an analyst downgrade on Friday.

Oil futures started the week lower, followed by Chesapeake Energy Corp.’s issues while Whiting Petroleum Corp.’s and Superior Energy Services, Inc.’s paper was divided.

Elsewhere, REIT CBL & Associates Properties, Inc.’s notes saw varying movements.

Endo, Mallinckrodt better

Endo’s notes finished the day better, traders said.

The 6% senior notes due 2025 gained 3¾ points to close at 66¾ bid. The Par Pharmaceutical Inc. 7½% senior secured notes due 2027 rose 1½ points to close at 94½ bid.

The Dublin-based drug maker’s capital structure shifted upward after news broke of a competitor being ordered to pay hundreds of millions of dollars in an opioid lawsuit.

On Monday, a district court judge in Oklahoma ruled that industry peer Johnson & Johnson would have to pay $572 million in damages to the state for allegedly exacerbating the opioid epidemic in the state.

Johnson & Johnson said it would appeal the ruling.

Last week, Endo announced a $10 million settlement with two counties in Ohio in a similar case.

“It’s a lower number than everyone was thinking,” a trader said. “These settlements look like a case-by-case situation so the sector will probably be just as volatile as it has been in recent months.”

Staines-upon-Thames, England-based peer Mallinckrodt’s notes also saw gains.

The 4¾% senior notes due 2023 added 2½ points to close at 53 bid.

DISH improves

In telecom, DISH’s paper was on the rise on Monday, market sources said.

The 5 7/8% senior notes due 2024 tacked on ½ point to close at 94 bid.

Early Monday, analysts at Raymond James issued an upgrade for the Englewood, Colo.-based pay-TV provider.

The company was upgraded to strong buy from market perform, citing the company’s potential to build out a 5G network.

Recently, to help facilitate a merger between mobile phone giants Sprint and T-Mobile, DISH agreed to acquire $5 billion in wireless assets to settle anti-trust inquiries.

Norwalk, Conn.-based wireline communications name Frontier’s notes were trending positively.

The 10½% senior notes due 2022 improved by 2 points to close at 52½ bid. The 11% senior notes due 2025, while seesawing throughout the day, held level at 50¾ bid.

L Brands up

Meanwhile, in retail, L Brands’ notes followed the day’s positive trend, traders said.

The 6¾% senior notes due 2036 rose 2 points to close at 86¼ bid. The 5¼% senior notes due 2028 garnered ¾ point to close at 91¾ bid.

The 6¾% senior notes dropped 2¼ points on Friday.

The loss was in reaction to the Columbus, Ohio-based retailer being downgraded by RBC analysts to sector perform from outperform.

The downgrade came on the heels of the company’s recent earnings report, where earnings outpaced expectations but comparable sales in its Victoria’s Secret division fell 9%.

Oil names divided

As oil futures moved lower, distressed energy tranches saw differing movements, market sources said.

Oklahoma City-based independent oil and gas producer Chesapeake Energy’s paper gained.

The 8% senior paper due 2025 picked up 1 point to close at 76 bid. The 8% senior paper due 2026 rose 1¾ points to close at 71¼ bid.

Denver-based producer Whiting’s notes saw differing movements.

The 6¼% senior notes due 2023 gained 1¼ points to close at 80¼ bid. The 6 5/8% senior notes due 2026 shaved off ½ point to close at 74½ bid.

Houston-based oilfield services provider Superior Energy’s issues were also mixed.

The 7 1/8% senior notes due 2021 dropped 2¾ points to close at 70 bid. The 7¾% senior notes due 2024 improved by 1¾ points to close at 63¾ bid.

West Texas Intermediate crude oil futures for October delivery lost 53 cents to settle Monday at $53.64 per barrel.

North Sea Brent crude oil futures for October delivery ended at $58.70 per barrel after a 64 cent loss.

CBL varies

Elsewhere, CBL’s paper varied in their movements, traders said.

The 5¼% senior notes due 2023 held level at 64½ bid. The 4.6% senior paper due 2024 improved by 1½ points to close at 64 bid.

The Chattanooga, Tenn.-based real estate investment trust has seen heightened attention over the last week.

Spurring was news that the company had completed a $27.75 million sale of a partial stake in an El Paso property.

Later in the week, the company announced that it would pursue a shareholder vote on a stock split in order to avoid a delisting of its common stock from the New York Stock Exchange.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.