E&P’s trade tight after oil gains for fifth day; Endo higher after offering announcement; Petsmart volume heavy

By Colin Hanner

Chicago, April 10 – It was overwhelmingly quiet in the distressed market on Monday, traders said, with recently priced deals getting the bulk of attention.

“[The high-yield market] is grinding higher,” a trader said. “But like I said, there’s not a lot of notable volume.

“The new [Ultra Petroleum Corp.] and Cedar Fair [LP] deal were the two main things, if anything, that were trading.”

Another trader said that Monday’s action would likely be the peak of the week, as the Passover holiday, paired with the Easter holiday and late spring vacations, would likely mean a lack of activity for the remainder of the week. Markets will be closed on Friday for Good Friday.

Though crude oil futures continue to gain, exploration and production companies were largely unaffected by such movement, trading nearly flat in some cases. California Resources Corp. traded higher on the session, while offshore driller Ensco plc was unchanged.

The retail sector was mixed on the session, with L Brands Inc. seeing two of its issues trade with some notable volume behind it

Endo International plc was higher in one of its issues after it announced a $750 million private offering.

Most other issues were trading tight, not going much wider than Phoenix-based pet retailer Petsmart, Inc.’s, which also had “heavy volume,” according to a trader.

Oil gains, E&P lags

For the fifth-straight session, crude oil future prices were on the rise, though the tandem association between the higher prices and distressed exploration and production gains was fainter.

California Resources’ 8% notes due 2022 were up 3/8 point to 82 3/8.

Plano, Texas-based oil and natural gas exploration and production company Denbury Resource Corp.’s 6 3/8% notes due 2021 were up ½ point to 84¼, a market source said.

And offshore drilling contractor Ensco’s 4½% notes due 2024 were unchanged at 86½.

Retail mixes

It was a mixed bag of movement for the retail sector on Monday, though no particular catalyst drove movement in either direction.

L Brands, Inc.’s 6 7/8% notes due 2035 were unchanged at 95, though its 6.95% notes due 2033 were down 1/8 point at 94.

And tween retailer Claire’s Stores Inc.’s 9% notes due 2019 were up 1 point to 40.

In health and pharma

As new health care legislation aimed at repealing parts of the Affordable Care Act seems to be all but gaining ground in Congress, hospital groups were nearly flat on the day.

Franklin, Tenn.-based hospital operator Community Health Systems Inc.’s 6 7/8% notes due 2022 were unchanged at 85½, a trader said.

In pharmaceuticals, Endo International saw some movement on the day.

Its 6% notes due 2025 were unchanged at 83¾, though its 6% notes due 2023 were up “almost 1” point to 86¾.

On Monday, the Dublin, Ireland-based pharmaceutical company announced the offering of $750 million of secured notes, which is expected to price on Wednesday. Proceeds are planned to refinance debt and for general corporate purposes.

Distressed roundup

A solid mover on the day, Petsmart Inc.’s 7 1/8% notes due 2023 were down ¾ point to 92¼, a trader said.

Satellite telecommunications Intelsat Jackson Holdings SA’s 7¼% notes due 2020 were up ¼ point to 93¼, a trader said.

The similarly-held 5½% notes due 2023 were up ¾ point to 84½.

San Antonio-based broadcasting and outdoor advertising company iHeartCommunications Inc.’s 9% notes due 2021 were up ½ point to 76¾.

Car-rental company Hertz Global Holdings Inc., which was down largely last week, possibly related to the ailing automotive industry figures released last week, were down ½ point in its 6½% notes due 2022.

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