Community Health slows after tumultuous Thursday; other healthcare mixed following suit; energy wobbles

By Colin Hanner

Chicago, Oct. 28 – Movement in distressed debt mirrored the mostly quiet equity market on Friday, as the U.S. gross domestic product report slightly beat expectations and several companies released their quarterly earnings.

Though news of another probe into Democratic presidential nominee Hillary Clinton’s emails shocked equity markets in the late afternoon, traders said there wasn’t much movement occurring in distressed debt.

A high yield downward mover that is “well into distressed,” as one trader put it, is Community Health Systems Inc., which is coming off a tumultuous third-quarter earnings report. After a bleak Thursday, during which several of its notes declined in the high single-digits, slowed down during Friday’s session.

The 6 7/8% notes due 2022 were unchanged at 76¾ on “a ton of trades,” but “their hemorrhaging stopped,” one trader said. Another trader had the notes in a “76-77 zip code.” The notes were down 8½ points during Thursday’s session.

Similarly trading on heavy volume for Community Health were its 8% notes due 2019, which were unchanged at 89 3/8. Another trader saw the notes at 89.

Community Health-spinoff, Quorum Health Corp., followed suit, as its 11 5/8% notes due 2023 were unchanged at 72½.

Pharmaceutical developer and marketer Valeant Pharmaceuticals International Inc. saw a shock in its equity stock on Friday, when it registered a sub-30 score on the Relative Strength Index, a metric that indicates a stock is being oversold.

Its 6 1/8% notes due 2025 saw some downward movement, moving down 3 points to 79, according to one trader, and its 5 7/8% notes due 2023 were down 2 7/8 to 79 1/8, a market source said.

Rounding out its movers was the 7½% notes due 2021, which were down 2½ points to 90¼, the day’s biggest decliner, according to a market source.

The company will announce its third-quarter results on Nov. 8.

Rounding out the health sector was Concordia International Corp., whose 7% notes due 2023 traded at 61, up two points, a trader said.

In energy

Peabody Energy Corp.’s 6½% notes due 2020 were up ¼ point to 45½, a market source said. Those same notes traded at 50¾ on Monday, according to the same market source.

A trader characterized the notes as “fairly quiet,” moving no more than “½-1 point on very little activity.”

California Resources Corp.’s 8% notes due 2022 were down 1 point to 70, on a “handful of trades,” a market source said. Another market source had the same notes down 1 point to 70¾.

Pacific Drilling SA’s 7¼% notes due 2017, which “haven’t traded in a while,” were down ¾ point from its last trade and closed at 40.

The number of active oil rigs in the U.S. fell by two to 441, according to weekly data from Baker Hughes, though commodity prices failed to rebound.

As an Organization of Petroleum Exporting Countries meeting was underway in Vienna on Friday, oil futures fell and remained down for the day after talks about supply cuts were ultimately fruitless.

Oil strongholds Exxon Mobil Corp. and Chevron Corp. announced their earnings on Friday, and reaction was mixed. Exxon released poor earnings for the quarter, highlighted by seven-year lows in production, while Chevron Corp. was quite the opposite, posting a profit for the first time in a year.

West Texas Intermediate crude fell 32 cents, or 0.6%, to $49.40 per barrel.

Brent crude fell 51 cents, or 1.1%, to $49.96 per barrel.

EP Energy’s 6 3/8% notes due 2023 were down ¾ to 70, on a couple of trades, a trader said, and Linn Energy was one of the day’s biggest high yield movers with a 2¼ point increase to 33¾.

Navios Maritime Holdings Inc.’s 7 3/8% notes due 2022 traded at 52½, up 1 point.

Windstream Corp.’s 6 3/8% notes due 2023 were down 1¼ to 89¼.

Industrial metals were up on the day, piggybacking off the most recent GDP report. Gold, silver and copper all saw gains rising over 1% on the day, and a producer of those industrial metals, Freeport-McMoRan Inc., saw movement in one of its notes.

“[Freeport] continues to inch up,” a trader said.

The trader saw the 3 7/8% notes due 2023 at “91¼-¾” zip code.

Round up

Intelsat SA’s 7¼% notes due 2019 were up ¼ point to 81, a trader said, and the 7¼% notes due 2020 were unchanged at 75¾.

iHeartCommunications Inc.’s 9% notes due 2022 were down ½-¼ point on two trades to 71 7/8, a market source said.

Its 10 5/8% notes due 2023 finished the day trading at 73, a ¼ point uptick from Thursday’s trading.

A trader had the 14% notes due 2021 down ½ point to 38 5/8.

Cliffs Natural Resources Inc.’s 6¼% notes due 2040 was unchanged at 70¾.

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