Remington Outdoor files bankruptcy; Community Health remains active after amending credit agreement

By James McCandless

San Antonio, March 26 – Traders reported a slow start to the Good Friday holiday week during which little activity is expected outside of news-driven names.

Remington Outdoor Co., Inc. saw notes active after the company filed for Chapter 11 bankruptcy on Sunday.

It was another active day for Community Health Systems, Inc. as issues were spurred on by the company’s fourth amendment to its credit agreement.

California Resources Corp. paper dominated the distressed energy sector on a slightly off day for oil futures.

Frontier Corp. and Intelsat SA continued to rule the telecom space. Mallinckrodt plc added more volume to the healthcare sector. Ensco plc and Denbury Resources Inc. were also active energy names.

Remington bankrupt

Madison, N.C.-based gun manufacturer Remington Outdoor filed for bankruptcy on Sunday, reports confirmed, amid ever-slowing sales and $950 million in debt. The company seeks to cancel $775 million of that debt (see related story elsewhere in this issue).

“This has been coming for a while,” a trader said. “They signaled that they were moving this way last month.”

The 7 7/8% notes due 2020 shaved off ¼ point to close at 25½ bid.

Community Health amends

Issues in Franklin, Tenn.-based hospital operator Community Health Systems started another week active, market sources confirmed. The company, along with wholly owned subsidiary CHS/Community Health Systems, Inc., entered into a fourth amendment to its credit agreement (see related story elsewhere in this issue).

The company has made several moves in recent weeks to rein in its debt problem, including refinancing of its near-term bond maturities, using proceeds from divestitures to repay term loan debt and hiring asset management firm Lazard, Citibank and JPMorgan Chase to advise on debt matters. The company has told stakeholders to prepare for potential asset sales in the coming year.

The 7 1/8% issues due 2020 gained ¾ point to close at 80 bid. The 6 7/8% issues due 2022 rose ¼ point to close at 57¼ bid.

California Resources active

Los Angeles-based independent oil and gas producer California Resources began the week active as oil futures ended the day mixed, traders confirmed.

“These issues are always a bellwether,” a trader said. “They get particularly active if oil sees a volatile day.”

The 8% paper due 2022 rose about 1 point to close at 80 bid. The 6% notes due 2024 fell about 2½ points to close at 61 bid.

Volume names trade

Norwalk, Conn.-based wireline telecom name Frontier Communications started the week right where it left off last week at the top of the distressed telecom space. The company’s notes have experienced a positive trend in trading as news that it has scrapped its quarterly dividend was received well by traders.

The 7 5/8% notes due 2024 traded up about ½ point to close at 62¼ bid. The 10½% notes due 2022 lost about ½ point to close at 86¼ bid. The 11% notes due 2025 fell ¼ point to close at 77¼ bid.

Luxembourg-based satellite communications company Intelsat also provided volume in distressed telecom.

The Intelsat Jackson SA 5½% issues due 2023 edged up about ¼ point to close just under 80¼ bid. The 7¼% issues due 2020 rose ½ point to close at 92½ bid.

Elsewhere in the healthcare space, Britain-based drug maker Mallinckrodt continued to provide its fair share of the day’s volume.

The 4¾% paper due 2023 jumped up about 1 point to close at around 77¾ bid.

Other oil names continued their activity as oil futures ended mixed on the day.

Britain-based oil driller Ensco saw its 5¾% bonds due 2044 tick up about ¼ point to close at around 67 bid.

Plano, Texas-based independent oil and gas name Denbury Resources’ 6 3/8% notes due 2021 lost about ½ point to close at 84½ bid. The 5½% notes due 2022 gained about ½ point to close just above 80½ bid.

“Look out for a dead week,” a trader said. “We have a holiday coming Friday, so unless a name has news under it, nothing will really trade this week.”

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