Ensco, Rowan notes gain as regulator approves merger; Univision issues recover after earnings release

By James McCandless

San Antonio, Feb. 15 – Capping off a week of earnings reports, the distressed space was slightly subdued on Friday.

Ensco plc and Rowan Cos. plc’s notes were gaining as they received approval from a British regulator for its pending merger.

Elsewhere in energy, California Resources Corp.’s issues rose on the back of oil futures while Sanchez Energy Corp.’s paper declined and Weatherford International plc’s notes saw mixed results.

Meanwhile, Univision Communications Inc.’s issues saw a partial recovery a day after reporting lagging earnings.

In the medical space, Teva Pharmaceutical Industries Ltd.’s paper rose, snapping a negative streak after a few days of negative headlines.

Sector peer Mallinckrodt plc’s notes dripped.

Diebold Nixdorf, Inc.’s issues ended higher to cap off a positive week.

Ensco, Rowan up

Ensco’s notes were gaining in the Friday session, traders said.

The 7¾% notes due 2026 rose 2½ points to close at 85 bid. The 7.2% notes due 2027 picked up 1¼ points to close at 81½ bid.

On Friday, the London-based contract driller announced that it had received clearance from the United Kingdom’s Competition and Markets Authority to merge with its Houston-based sector peer Rowan.

Rowan’s issues also closed the session better.

The 4¾% notes due 2024 added ½ point to close at 80½ bid.

The two companies entered into a $2.38 billion merger agreement in October 2018, postponing the original January closing date due to a revision of the stock exchange ratio.

As it stands, Rowan shareholders stand to receive 2.75 Ensco shares for every Rowan share when the merger is finalized.

Ensco is expected to hold a general meeting on Feb. 21 to approve resolutions related to the transaction.

“They’ve been working to smooth things over on the shareholder side,” a trader said.

Oil names mixed

Elsewhere in the energy sector, oil futures rose though distressed oil names ended mixed, market sources said.

Los Angeles-based independent oil and gas producer California Resources’ paper improved.

The 8% notes due 2022 ended ¾ point higher to close at 79½ bid.

Houston-based sector peer Sanchez Energy’s notes declined.

The 6 1/8% notes due 2023 shaved off 3 points to close at 15 bid.

Baar, Switzerland-based oilfield services provider Weatherford’s issues were mixed by the Friday close.

The 8¼% notes due 2023 dropped ¼ point to close at 69¾ bid. The 9 7/8% notes due 2024 gained 2½ points to close at 74 bid.

At the end of the week, West Texas Intermediate crude oil futures for March delivery rose $1.18 to close at $55.59 per barrel.

North Sea Brent crude futures for March delivery closed at $66.25 per barrel after picking up $1.68.

Univision rises

Meanwhile, in communications, Univision’s paper saw a partial recovery traders said.

The 5 1/8% paper due 2023 edged up ¼ point to close at 91¼ bid. The 5 1/8% paper due 2025 also gained ¼ point to close at 88 bid.

On Thursday, the New York City-based media company issued its fourth-quarter earnings report, showing a loss of $40.2 million.

The company’s dragging quarter was pinned on an impairment charge from its English-language news arm, insufficient advertising revenues and an ongoing dispute with pay-TV provider DISH.

Teva gains

In the medical space, Teva’s notes improved after a week of negative movement, market sources said.

The 3.15% notes due 2026 improved by ¼ point to close at 81½ bid. The 4.1% notes due 2046 rose ¾ point to close at 73 bid.

The Petach Tikva, Israel-based generic drug manufacturer’s week was marred with negative headlines after releasing its fourth-quarter report.

It reported a 53 cents per share profit, disappointing analysts who had pegged it at 54 cents per share.

S&P Global Ratings reacted to the news Thursday by affirming a negative outlook.

Elsewhere in the sector, Dublin-based sector peer Mallinckrodt’s issues took a dip.

The 4¾% notes due 2023 went 2½ points negative to close at 77 bid.

Diebold higher

Diebold’s paper also saw a better session, traders said.

The 8½% paper due 2024 picked up 1¼ points to close at 84¼ bid.

The North Canton, Ohio-based connected commerce solutions company’s paper saw a rapid ascent this week after posting a surprisingly positive fourth-quarter report.

The 8½% paper surged 12½ points after the news broke on Wednesday.

While posting an 8 cents per share loss, the market focused on its rising $1.29 billion in revenues.

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