Sears notes tumble after release of abysmal Q1 report; PetSmart issues gain, stemming multi-day decline

By James McCandless

San Antonio, May 31 – Traders reported another light day in the distressed debt market on Thursday in the tail end of a short week.

Sears Holdings Corp. notes tumbled after the company released its Q1 report and announced the closure of 72 stores.

PetSmart, Inc. issues gained after days of decline and a week after the company announced the appointment of a new CEO.

Bristow Group Inc. paper declined again, extending a downward trend started after the company released a subpar Q1 report last week.

Intelsat SA notes traded up. Recently, the company released a disappointing Q1 report. Frontier Communications Corp. issues were mixed. The company is working to regain investor confidence after a recent failed auction. Mallinckrodt plc paper declined.

Sears craters

Hoffman Estates, Ill.-based department store chain Sears notes fell, traders confirmed, after the company released its Q1 report and signaled its intention to close 72 stores. The company reported a quarterly loss of $424 million and a loss of $3.93 per share.

“This is par for the course for them,” a trader said. “It’s just the continuation of a slow decline and they’ll keep making adjustments and moves until they can’t anymore.”

The 6 5/8% notes due 2018 lost about 3½ points to close at around 90½ bid. The 8% notes due 2019 fell about 4¼ points to close at around 59 bid.

PetSmart up

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

The new CEO is expected to stem the tide of the company’s decline most recently spurred along 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 gained about ¼ point to close at around 69 bid. The 8 7/8% notes gained about ¼ point to close at 47¾ bid.

On Wednesday, the 5 7/8% notes fell ¾ points and the 8 7/8% notes lost about ½ point.

Bristow falls

Houston-based oil and gas aviation services company Bristow Group paper continued to decline, traders confirmed. Last week, the company posted a loss of $2.84 per share in its Q4 report.

The 6¼% paper due 2022 faced downward pressure but remained level at around 77½ bid.

On Wednesday, the 6¼% paper lost about ½ point.

Volume names trade

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

The Intelsat (Luxembourg) SA 7¾% paper due 2021 rose 1¾ points to close at 82½ bid. The 8 1/8% paper due 2023 jumped up about 4½ points to close at around 79 bid.

Norwalk, Conn.-based wireline name Frontier Communications issues were mixed. The company is working to regain investor confidence after a failed auction of its Florida assets, which 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 dropped about ½ point to close at around 67½ bid. The 10½% notes due 2022 rose about ¼ point to close at around 90 bid. The 11% notes due 2025 remained level at around 80 bid.

Britain based drug maker Mallinckrodt saw its 4¾% paper due 2023 decline about ¼ point to close at around 80¼ bid.

“Today was a little better, but not by much,” a trader said. “Tomorrow we’ll probably see the full effect of the tariffs that were just announced.”

© 2015 Prospect News.
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