Talen trades higher as tender, term loan announced; E&P’s up on oil’s resurgence; Valeant, Concordia gain

By Colin Hanner

Chicago, March 30 – The distressed market was generally higher on Thursday, a trader said, as oil and related bonds continued to rise higher for the third straight session.

“The general theme [in the distressed market] was up,” a trader said.

In energy, Allentown, Pa.-based energy and power generation company Talen Energy Corp. saw gains across the board on news that it began a tender offer for nearly $1 billion principal amount of three series of its notes.

In the exploration and production sector, California Resources Corp. continued to lead as most-active in the distressed E&P space, though mostly long-term bonds from Noble Holding International Corp., Parker Drilling Co. and Ensco plc followed with several-point gains of their own.

In health care, Franklin, Tenn.-based hospital operator Community Health Systems Inc. was up after a downturn on Wednesday, and Canadian pharmaceutical company Valeant Pharmaceuticals International, Inc. was firmer after the company announced it had extended the maturity date of some of its term loans.

Retailer Neiman Marcus Group Inc. was higher in an issue and flat in another, iHeartCommunications, Inc. was a touch higher and Frontier Communications Corp. was up several points.

Talen higher on tender

Noteholders sent Talen Energy’s distressed notes higher on Thursday following a tender offer and a new term loan B facility.

Its 6½% notes due 2025 – not included in the tender offer – were up 1½ points to 85, a trader said.

The 4 5/8% notes due 2019 – included in the tender offer – were up 3½ points to 102.

Also included in the tender offer were the 4.6% notes due 2021, which were up 1 5/8 points to 85¾.

The company also announced a $400 million syndicated term loan B facility, as well as a repricing of its existing $600 million term loan B facility. Together, the tender offer and the new term loan B facility will be used to refinance, repay or repurchase Talen’s existing debt, a news release said.

Fellow energy company GenOn Energy, Inc.’s 9 7/8% notes due 2020 were unchanged at 65½.

Oil higher for third session

Whispers of extended supply cuts to the Organization of Petroleum Exporting Countries and non-OPEC members were brought up a rung on Thursday when Persian Gulf emirate’s Oil Minister Issam Almarzooq said Kuwait was holding to previous statements that they would support cuts into the second half of the year, a Bloomberg story reported.

West Texas Intermediate crude surged above $50, and distressed E&P companies followed.

California Resources’ 8% notes due 2022 were up 1½ point to 81½.

Candian oil sands producer MEG Energy Corp.’s 7% notes due 2024 were up 2 points to 91¼, according to a market source

Plano, Texas-based oil and natural gas production and exploration company Denbury Resources Inc.’s 6 3/8% notes due 2021 were up 1½ points, according to a market source.

Contract driller Parker Drilling’s 6¾% notes due 2022 were up 1¼ points to 89.

Offshore drilling contractor Ensco plc’s 5¾% notes due 2044 were up 1¾ points to 74¾.

Marine transportation service company GulfMark Offshore Inc., which mainly focuses on the offshore drilling industry, saw a 1-point gain in its 6 3/8% notes due 2022, which finished at 47½.

And offshore driller Noble Holdings’ 6.20% notes due 2040 were up 3 points to 73.

In health

Down largely on Wednesday following a report that a new health care bill may appear as soon as next week, Community Health’s 6 7/8% notes due 2022 were up 2¼ points on Thursday to 85¾, a trader said.

The hospital sector was generally higher last Friday and Monday following the failed health care bill, but has wobbled on the indecision surrounding the future of the bill in the past few sessions.

In pharmaceuticals, Valeant’s 6 1/8% notes due 2025 were up 1 point to 77.

The company announced it had pushed back $1.19 billion of revolving credit commitments from April 20, 2018 to April 20, 2020 during Wednesday’s session.

And Concordia International Corp.’s 7% notes due 2023 were again higher on the session, up 2½ points to 20¾.

Neiman more active

After a sleepy Wednesday session, Neiman Marcus Group’s issues were once again active.

The 8% notes due 2021 were up 3/8 point to 60 5/8, a trader said, while the 8¾% notes due 2021 were unchanged at 56½.

Distressed wrap-up

Trading about “a half-dozen times” were iHeartCommunications’ 9% notes due 2021, which were up ½ point to 75½, a trader said.

Global shipper Navios Maritime Holdings Inc.’s 7 3/8% notes due 2022 were up 1 to 85.

Construction equipment rental company Ahern Rentals Inc.’s 7 3/8% notes due 2023 were down ½ point to 86½.

And telecommunications company Frontier Communications’ 7 7/8% notes due 2027 were up 2½ points to 82 7/8.

Paul A. Harris contributed to this review

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