Petsmart paper drops on CEO exit; Navios swings to a loss; Valeant, California Resources remain active

By Stephanie N. Rotondo

Seattle, Aug. 10 – The distressed debt arena was “kind of weakening up a little bit” on Thursday, a trader said, adding that the space was following the broader markets.

The equity markets dropped 1% to 2% during the session, as investors remained concerns about growing tensions between the United States and North Korea. Domestic crude oil prices meantime declined over 2% as OPEC production was increased and Russia was said to be mulling increasing its own output.

With the general air of negativity persisting, woe betide the company that had news that could be taken poorly.

Petsmart Inc. was one such name, as the company announced that Michael J. Massey was stepping down from his role as chief executive officer.

Navios Maritime Acquisition Corp. was another such name. The Monaco-based owner and operator of tanker vessels reported earnings on Thursday, swinging to a loss from the previous year’s profit.

Meanwhile, recently notable names like Valeant Pharmaceuticals International Inc. and California Resources Corp. remained in focus.

A trader said Valeant’s 6 1/8% notes due 2025 continued to be active, but fell for the second straight session.

He called the issue off a quarter-point at 83.

California Resources’ 8% second-lien notes due 2022, however, had their “first non-down day in awhile,” a trader said, deeming the debt unchanged at 56½.

In the telecom space, Frontier Telecommunications Corp.’s benchmark 11% notes due 2025 were seen dropping 2 points to end at 86½, while the 6¼% notes due 2021 fell almost half a point to 84¾.

Windstream Holdings Inc. also lost ground, as its 7¾% notes due 2020 closed almost 3 points lighter at 87, a trader said.

Another market source saw the 6 3/8% notes due 2023 slipping a point to 79.

There was no fresh news out on either company to cause the weakness.

Petsmart falls on CEO exit

Phoenix-based pet products retailer Petsmart announced on Thursday that its CEO was leaving the company after two years on the job.

The market didn’t react well to the news, and a trader said the company’s 7 1/8% notes due 2023 declined 2 points to 85 1/8.

“They were maybe even lower intraday,” the trader added.

Massey joined Petsmart after the company went private in 2015. Since then, the company has expanded, purchasing online pet retailer Chewy.com earlier this year.

Petsmart said it was searching for a replacement. In the meantime, Raymond Svider, a managing partner at private equity owner BC Partners, will serve as executive chairman, overseeing the senior leadership team.

Navios nicked

Navios Maritime’s earnings were less than stellar on Thursday, resulting in a decline in the company’s debt.

A trader saw the 7 3/8% notes due 2022 slipping a quarter-point to 78¼.

For the second quarter, Navios posted a net loss of $64.42 million, or 41 cents per share, on revenue of $58.46 million.

On an adjusted basis, the loss per share was 3 cents.

The quarter’s results compared to a $12.18 million profit the year before. That equaled EPS of 8 cents.

Revenue for the previous year was $74.5 million. Adjusted EPS was 8 cents.

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