Acosta plummets after earnings release; Sears notes mixed as market digests results

By James McCandless

San Antonio, Sept. 17 – A new week in distressed debt trading kicked off with familiar names dominating volume.

Acosta, Inc.’s notes plummeted after the private company released its second-quarter earnings on Monday.

Sears Holdings Corp.’s paper closed mixed on Monday as the market continues to react to the late Thursday release of its second-quarter earnings report.

Windstream Holdings, Inc.’s paper was flat to higher. Last week, its CEO outlined the company’s plan to refinance its revolving credit facility and a term loan.

Intelsat SA’s notes declined, while Frontier Communications Corp., another distressed telecom name, saw issues trade mixed.

American Tire Distributors’ paper maintained a negative trend post-recapitalization.

Acosta down

Acosta’s notes plummeted in Monday activity, traders said.

The 7¼% notes due 2022 dropped 15 points to close at 29 bid.

The privately held company issued its second-quarter earnings on Monday, leading to the drop.

“From what I’ve seen, the numbers are pretty bad,” a trader said. “They’ve got a big hill to climb, in terms of the bonds.”

Acosta is a Jacksonville, Fla.-based outsourced sales and marketing services provider.

Sears mixed

Sears’ notes were mixed in distressed trading, market sources said.

The 6 5/8% notes due 2018 rose about 3 points to close at 95 bid. The 8% notes due 2019 lost 1¾ points to close at 37¾ bid.

On Friday, the 6 5/8% notes were level.

Late Thursday, the company released its second-quarter report, showing widening losses.

The company reported a loss of $4.68 per share, increasing from a loss of $2.33 per share in the second quarter of 2017.

Windstream mixed

Elsewhere, Windstream paper ended up flat to higher, traders said.

The 7¾% paper due 2021 was level at around 62½ bid. The 7½% paper due 2022 jumped up 11½ points to close at 58 bid. The 6 3/8% paper due 2023 rose about 2¼ points to close at around 47¼ bid.

Last week, president and chief executive officer Tony Thomas outlined the company’s financial plans at a conference. Thomas pointed out that looking at refinancing its $975 million revolving credit facility is one of the top priorities after legal proceedings conclude against a hedge fund that claims the company is in default.

“We’ve a couple of ways to address that, whether that’s through asset sales or through first-lien refinancing or we can take first-lien refinancing and potentially pay down the revolver a little bit to get it extended out,” Thomas said.

Windstream is a Little Rock, Ark.-based network communications name.

Volume names trade

In distressed telecom, Intelsat’s notes declined at the start of the week.

The 5½% notes due 2023 shaved off about ¼ point to close at 90¾ bid. The 8 1/8% notes due 2023 fell about ¼ point to close at 85 bid.

Frontier Communications, another distressed telecom name, saw its issues trade mixed.

The 7 5/8% notes due 2024 were level at around 66 bid. The 10½% notes due 2022 were level at around 90 bid. The 11% notes due 2025 lost about ¼ point to close at 79¾ bid.

American Tire paper maintained a steady decline.

The 10¼% paper due 2022 lost 1¼ points to close at 26¾ bid.

The paper has been trending negative since the company reached a recapitalization agreement with 70% of its bondholders on Sept. 5. The agreement converts its debt into a 95% stake of its restructured common equity, reducing debt by $1.1 billion.

The move triggered ratings downgrades from Moody’s Investors Service and S&P Global Ratings.

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