Telecom bonds continue to trade better; CRC, Denbury remain firm; Fannie, Freddie in retreat

By Stephanie N. Rotondo

Seattle, Sept. 28 – There was a firm tone to the distressed debt market on Thursday.

However, the day’s trading centered on the usual go-to names, according to market sources.

For instance, Windstream Holdings Inc.’s 6 3/8% notes due 2023 continued to be active – and better – trading up 2¼ points to 71½, a source reported.

The name has been edging upward ever since Tuesday trading. The gains came after the company announced late Monday that it had received a notice of default related to the transfer of assets to its Uniti Group Inc. unit.

The company is denying that a default occurred.

Elsewhere in the telecom sector, Frontier Communications Corp.’s benchmark 11% notes due 2025 were a touch higher at 84¼, a source said. That compared to levels at 84 as of Wednesday’s close.

The source noted that the paper traded as high as 85¾ during the session.

In the oil and gas arena, California Resources Corp.’s 8% second-lien notes due 2022 remained strong, adding nearly a point to close at 66½.

Sector peer Denbury Resources Inc. was also better, ticking up half a point to 61½.

Fannie, Freddie falter

Despite the somewhat firm feel of the day, Fannie Mae and Freddie Mac preferreds were in retreat.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were off 7 cents, or 1.0%, at $6.90.

Over 3.28 million of the preferreds changed hands.

Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) were down 12 cents, or 1.75%, at $6.73.

Over 1.10 million of those preferreds were exchanged.

The weakness came in the wake of reports that Sen. Bob Corker – a name often associated with GSE and housing reform, given his sponsorship of the Warner-Corker bill – announced that he would not be seeking re-election.

Corker’s bill has failed to gain the traction necessary to get reform moving, but it has come the closest of any of the multiple bills presented. But Steven Mnuchin, Treasury secretary, has also indicated that housing reform won’t even be on the table until early in 2018 – this despite promises by both Mnuchin and the Trump Administration that such reform would be done by August of 2017.

PTC in trouble

A trader noted that trading in PTC Therapeutics Inc.’s stock had been halted “all day,” as the company waited for the Food and Drug Administration to issue its report on its experimental drug aimed at treating Duchenne muscular dystrophy.

As such, he said there had been no trading in the company’s 3% convertible notes due 2022 either.

“If it’s taking that long [for the FDA] to come up with language, it isn’t going to be good,” the trader commented.

PTC’s convertibles were trading in the mid-70s for the last couple of sessions, according to Trace data. That compared to levels around 80 at the start of the week.

The underlying stock ended Wednesday’s session at $17.46.

At day’s end, the FDA said that the drug might be effective, but that more work needed to be done to prove it.

An advisory panel voted 10-1 that the results of PTC’s study were inconclusive, pushing out potential approval of the drug even further.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.