Ferrellgas drops after disappointing earnings; Blackboard jumps on segment sell-off news

By James McCandless

San Antonio, March 8 – The distressed space shifted focus to news-driven names as the week came to a close on Friday.

Ferrellgas Partners LP’s notes saw a drop after the company released a disappointing second-quarter earnings report.

Meanwhile, Blackboard Inc.’s notes rose higher amid news that it has entered a deal to sell its collegiate payments arm.

In telecom, Windstream Holdings, Inc.’s paper closed better as $500 million of its debtor-in-possession financing became free to trade.

Sector peer Digicel Group Ltd.’s notes slipped as its new senior secured notes began trading.

Lower oil futures begot declines for Weatherford International plc’s and Sanchez Energy Corp.’s issues while California Resources Corp.’s paper ended mixed.

Retailer Neiman Marcus Group, Inc.’s notes ended the week on a low note.

Dean Foods Co.’s issues rose, stemming a negative streak.

Ferrellgas drops

Ferrellgas’ notes were dropping in the Friday session, traders said.

The 6¾% notes due 2023 lost 1 point to close at 87½ bid. The 6½% notes due 2021 fell 1¼ points to close at 88¼ bid.

On Friday morning, the Overland Park, Kan.-based propane name issued its second-quarter earnings report.

The company showed earnings of 44 cents per unit, missing analyst expectations of 57 cents per share.

It also disappointed on its revenue by reporting $573.4 million for the quarter.

“In this space, they are one of the most over-leveraged companies,” a trader said. “But it doesn’t seem like they’re in the red zone yet.”

Blackboard jumps

Meanwhile, Blackboard’s issues saw a large boost, market sources said.

The 9¾% notes due 2021 jumped up 13½ points to close at 86½ bid.

News broke on Thursday that the Washington-based education technology solutions company has entered an agreement to sell its Blackboard Transact segment which facilitates student transactions on and off campus.

The segment was sold to Reverence Capital Partners LLC.

The terms of the deal were not disclosed.

“It’s been a while since they’ve traded,” a trader said. “From what I understand, they have a lot of debt but they’ve been slow to react.”

Windstream better

In the telecom space, Windstream’s paper closed the session better, traders said.

Windstream’s 9% paper due 2025 added 1 point to close at 65½ bid. The company’s 10½% paper due 2024 picked up 1¾ points to close at 70 bid.

On Friday, subsidiary Windstream Services LLC’s $500 million DIP financing became free to trade.

The covenant-light term loan was quoted at 99 7/8 bid, par 3/8 offered, according to a market source.

The company filed for Chapter 11 bankruptcy last month.

Digicel slips

Sector peer Digicel’s notes slipped, market sources said.

The 6% notes due 2021 dropped 1¼ points to close at 85¼ bid. The 6¾ notes due 2023 shaved off ¾ point to close at 71¾ bid.

The Kingston, Jamaica-based mobile phone network provider’s new $600 million issue of five-year first-lien senior secured notes began trading on Friday.

The company’s structure has seen heightened activity since it announced last week that it came to an agreement with its stakeholders to ease the covenant on its bonds to avoid a breach.

Oil trends negative

Distressed oil tranches trended negative as oil futures closed lower, traders said.

Baar, Switzerland-based oilfield services provider Weatherford’s issues declined.

The 9 7/8% notes due 2024 lost 3 points to close at 68½ bid. The 8% notes due 2021 shaved off ¼ point to close at 56¼ bid.

Houston-based independent oil and gas producer Sanchez Energy’s paper also closed negative.

The 6 1/8% paper due 2023 lost 1 point to close at 13¾ bid.

Los Angeles-based producer California Resources’ notes were mixed, but mostly flat.

The 6% notes due 2024 shed ¼ point to close at 68¾ bid. The 8% notes due 2022 held level at 74¼ bid.

West Texas Intermediate crude oil futures for April delivery ended the session 59 cents lower at $56.07 per barrel.

North Sea Brent crude oil futures for May delivery closed Friday at $65.74 per barrel after losing 56 cents.

Neiman Marcus lower

In retail, Neiman Marcus’ issues shifted lower, market sources said.

The 8% notes due 2021 trimmed ¼ point to close at 56¼ bid.

Since announcing last week that the Dallas-based luxury retailer had reached an agreement with bondholders for three-year maturity extensions and an exchange for MyTheresa equity, the company’s issues have seen heightened attention.

Dean Foods better

Dean Foods’ paper rose, breaking a string of declines, traders said.

The 6½% paper due 2023 gained ½ point to close at 67¾ bid.

On Thursday, the 6½% paper lost ¼ point

The Dallas-based dairy product manufacturer’s paper has been at the forefront of the distressed space, trading on a negative streak since announcing a strategic alternatives review following a dismal earnings report.

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