Valeant ‘top dog’ on most active list; Community Health swings down; Murray active; Avaya dips

By Colin Hanner

Chicago, Dec. 12 – For the third-consecutive session in the distressed arena, activity was centered on a pharmaceutical company that made news off an asset sale earlier in the week, and several other notable names traded on Thursday, though activity did not deviate too far from the previous session’s finishes.

Laval, Quebec-based Valeant Pharmaceuticals International, Inc. – the “top dog” of the distressed market on the day, according to one trader – stole the bulk of activity again in a series of distressed securities that has been trading consistently throughout the week.

Two of its most-traded securities were down fractions of a point.

Healthcare groups, including Community Health Systems, Inc., were down on the day, hours after the Senate voted to pass a budget resolution that could put the Affordable Care Act in jeopardy.

Private coal company Murray Energy Corp. continued to stay in the mix, trading down off Wednesday’s gains.

Technology company Avaya Inc. saw losses in several of its distressed securities on the session, traders said.

After extending a private exchange offer for its senior notes to mid-March, Cumulus Media Inc. dipped on recent highs, traders said.

In the energy and production arena, several oil and natural gas producers saw boosts off of the biggest rally in oil future prices so far this year.

And a swath of distressed retailers – Neiman Marcus Group, Inc., rue21, Inc. and J.C. Penney Co., Inc. – saw mixed movement on the day.

Valeant keeps attention

A series of asset sales, as well as comments targeted at the pharmaceutical industry from the president-elect have affected Valeant Pharmaceuticals this week, prompting an initial surge, then eventual softening as the week draws near a close.

Several of its notes continued to weaken on Thursday, including the 6 1/8% notes due 2025 – the most active out of any distressed security, according to one trader – which were down 7/8 point to 75, a trader said.

Additionally, the 6 3/8% notes due 2020 were down 5/8 point to 88¾.

In other pharmaceutical names, Concordia International Corp.’s 9% notes due 2022 were up ¾ point to 87½, a trader said.

Health down

Early Thursday, Senate Republicans moved closer to the repealing of the Affordable Care Act, otherwise known as Obamacare, by voting to approve a budget resolution that could effectively repeal major parts of the government-sponsored healthcare program in the near future.

Several healthcare and hospital groups seemed to react to the vote on Thursday, among them Community Health Systems, whose 8% notes due 2019 were down 1 1/8 points to 88¾, a trader said.

The company’s 6 7/8% notes due 2022 were down ½ point to 75½.

Denver-based Bioscrip Inc.’s 8 7/8% notes due 2021 were down 1/8 point to 78 3/8, a trader said.

Coal mixed

St. Clairsville, Ohio-based Murray Energy were up 1 point on Wednesday before paring some of those gains on Thursday, traders said.

The 11¼% notes due 2021 were down ¼ point to 74, a trader said, while another traded said they were down around 3/8 point to the same level.

Peabody Energy Corp.’s 6½% notes due 2020 – “non-PSA [purchase and sale agreement] bonds,” one trader said – were doing “a little better,” finishing with a 41 handle.

Avaya still on ‘active’ streak

The downturn for technology company Avaya seems to keep coming.

A trader said the 10½% notes were down 3½ points to 24½, while the 7% notes due 2019 were down 3/8 point to 82½.

A market source previously told Prospect News that the prospects of a Chapter 11 filing seemed more likely as the company recently called for new terms of debtor-in-possession financing.

Cumulus dips

On Wednesday, broadcasting company Cumulus Media announced an extension for the private exchange offer for any and all of the $610 million of 7¾% senior notes due 2019 issued by Cumulus Media Holdings Inc.

A trader said those notes printed as low as 39 on Thursday, before surging back up to a 41½ handle.

The exchange will now continue until 5 p.m. ET on March 13, extended from 11:59 p.m. ET on Jan. 10. The early deadline is now 5 p.m. ET on Jan. 23, extended from 11:59 p.m. ET on Jan. 10 and, before that, from 5 p.m. ET on Dec. 23.

Investors had tendered $431,307,000 principal amount, or 70.7%, of the notes as of the most recent exchange expiration, according to a company update.

E&P surging

The biggest rally for oil futures this year came in West Texas Intermediate crude climbing to $53.37, a 2.2% increase, off news that Saudi Arabia cut production more than needed in accordance with an Organization of Petroleum Exporting Countries deal, as well as information showing that the U.S. produced a record amount of crude last week.

Among the gainers were Bonanza Creek Energy, Inc.’s 6¾% notes due 2021, up 1½ points to 87½ on a “half-dozen” trades, a trader said.

French geoscience company CGG SA’s 6½% notes due 2021 were up 1¾ points to 49¼, a market source said, while MEG Energy Corp.’s 7% notes due 2024 up 1¼ points to 95½.

GenOn Energy Inc.’s 9½% notes due 2018 were up ½ point to 72.

Seeing no real swings were Pacific Drilling SA’s 5 3/8% notes due 2020, unchanged at 38½, a trader said.

Retailers mixed

Though volume was not as high as it’s been with a handful of distressed retailers in past weeks, including Neiman Marcus group, several traded during the session.

Neiman’s 8% notes due 2021 were down 3/8 point to 68 1/8, a trader said, adding that the 8% notes due 2021 were unchanged at 69.

J.C. Penney’s 6 3/8% notes due 2036 were down ¾ point to 82¼.

And, with only one trade, rue21’s 9% notes due 2021 were up ¼ to 20½.

One-off roundup

Talen Energy Corp., an independent power producer of nuclear, coal and gas, saw a ½-point decrease in its 6½% notes due 2025 to 79¾, a trader said.

Satellite company Intelsat SA’s 5½% notes due 2023 were up “3/8 [point] or so” to 67 5/8, a trader said.

iHeartCommunications, Inc.’s 9% notes due 2021 were down 1/8 point to 75 3/8.

And modular space and storage company Algeco Scotsman, Inc.’s 10¾% notes due 2019 were down ½ point to 76¼.

Susanna Moon contributed to this review.

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