California Resources mixed as oil futures tumble; PetSmart declines a week after CEO appointment

By James McCandless

San Antonio, May 29 – Traders in the distressed debt market reported a slow day Tuesday as the short week got under way.

California Resources Corp. notes were mixed after major oil producing countries signaled their preference for lifting output caps.

PetSmart Inc. issues traded down a week after the company announced the appointment of a new CEO.

Bristow Group Inc. paper fell as the market continued to react to a disappointing Q4 report released last week.

Intelsat SA notes declined. Recently, the company released a lackluster Q1 report. Elsewhere in telecom, Frontier Communications Corp. issues were down. The company is managing the fallout from a recent failed auction. Mallinckrodt plc paper traded up.

California Resources mixed

Los Angeles-based independent oil and gas producer California Resources’ notes were mixed, traders confirmed, as the company’s fortunes are largely tied to oil futures. Oil prices have been declining recently as major oil producing nations signaled their intention to remove output caps at an imminent OPEC meeting.

“These notes are really a bellwether for the energy sector,” a trader said. “So what’s happening with oil will ultimately reflect in these notes.”

The 6% notes due 2024 gained about 1¼ points to close at around 79¼ bid. The 8% notes due 2022 fell about 2¾ points to close at 86½ bid.

PetSmart off

Phoenix-based pet supplies retailer PetSmart issues declined, market sources confirmed. Last Monday, the company announced the appointment of retail executive J.K. Symancyk as its new chief executive officer.

The new CEO is expected to reverse the company’s slide most recently spurred on by Amazon.com, Inc.’s announcement that it would be offering an in-house brand of dog food to its Prime subscribers.

The 5 7/8% notes due 2025 shaved off ½ point to close at 69½ bid. The 8 7/8% notes due 2025 lost about ¼ point to close at 48¼ bid.

On Friday, the 5 7/8% notes fell ¼ point.

Bristow Group falls

Houston-based oil and gas aviation services company Bristow Group fell, traders confirmed. Last week, in the company’s Q4 report, Bristow reported a loss of $2.84 per share.

“They are also tied to what happens in oil and they got the brunt of that today,” a trader said.

The 6¼% paper due 2022 lost about ¼ point to close at around 78 bid.

Volume names trade

Luxembourg-based satellite communications company Intelsat paper declined. A recent Q1 report showed a 56 cents per share loss, missing analyst estimates of 41 cents per share.

The Intelsat (Luxembourg) SA 7¾% paper due 2021 fell about 2¾ points to close at around 79 bid. The 8 1/8% paper due 2023 lost about ¾ points to close at 73½ bid.

Norwalk, Conn.-based wireline name Frontier Communications issues were down. The company is reeling from a failed auction of its Florida assets did not produce bids that it considered satisfactory. The auction is part of its efforts to reduce debt.

The 7 5/8% notes due 2024 fell about 2½ points to close at around 67¼ bid. The 10½% notes due 2022 declined ¾ point to close at 89 bid. The 11% notes due 2025 lost about 1½ points to close at around 79¼ bid.

Britain based drug maker Mallinckrodt saw its 4¾% paper due 2023 edge up about ¼ point to close at around 80½ bid.

“It’s a short week and not everyone’s back yet,” a trader said. “We may see some more activity as the week goes but today was light and tomorrow may be the same.”

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