Community Health ticks higher on low-volume session; iHeart continues inactive streak; Intelsat gains

By Colin Hanner

Chicago, April 24 – Activity in the distressed debt market was sparse on a lackluster Monday, traders said, with regular high-yield issues stealing the action. Idiosyncratic issues saw wider movement on the day.

“There’s just not that much going on,” a trader said. “Any volume was in regular high yield.”

Community Health Systems, Inc. was the most active with a dozen trades, a trader said, and ticked higher, followed by Canadian pharmaceutical company, Valeant Pharmaceuticals International, Inc.

Intelsat SA was higher by a round number, traders said, and fellow aerospace company Sequa Corp. fell by several points on the session.

iHeartCommunications, Inc. continued to be inactive, with the building sentiment that a proposed exchange offer will not be carried out successfully for the radio and broadcasting company.

And, after releasing positive fourth quarter and year-end results on Thursday, 99 Cents Only Stores LLC was several points higher on the session.

In health and pharma

As the government looks to avoid a shutdown this week, health care and related legislation may take a backseat to more pressing matters. Health care-related issues continued to stay active in the distressed space.

Franklin, Tenn.-based hospital operator Community Health Systems’ 6 7/8% notes due 2022 were up 1 point to 83½, building on gains seen on Friday.

And Valeant Pharmaceuticals’ 6 1/8% notes due 2025 were up “almost 1” point to 73¾, a trader said, a reverse trend from Friday’s across-the-board declines.

A market source said Valeant’s 7½% notes due 2021 were up ½ point to 83.

iHeart quiet

iHeartCommunications, which was quiet on Friday and continued to be on Monday, made headlines before the weekend stating that lenders would oppose an exchange offer aimed at avoiding bankruptcy, Reuters reported.

The lack of movement may have been because investors saw this coming, a trader said.

“There were some headlines out, and I don’t think that any of that stuff is necessarily new,” a trader said. “So, there really hasn’t been a lot of trading or a lot of action. I don’t think anyone expects this exchange to go through. I think a lot of headlines are posturing.”

Paper higher

Two paper-related issues traded with some noticeable activity behind them, a continuation of similar movement seen last week.

Printing company Cenveo Inc.’s 6% notes due 2019 were up ¾ point to 82.

And packaging company PaperWorks Industries, Inc.’s 9½% notes due 2019 were up ¼ point to 77.

Aerospace mixed

Sequa Corp.’s 7% notes due 2017 were down 3 points to 87, a trader said, adding that it is an issue that is not traded often.

The aerospace and diversified industrial company upsized a 4.5-year covenant-light first-lien term loan B to $900 million in mid-April, the proceeds of which will be used to recapitalize and refinance existing debt to avoid bankruptcy.

Telecommunications satellite company, Intelsat Jackson Holdings SA’s 5½% notes due 2023 were up 7/8 point to 85 3/8, a trader said. Another trader said the notes were up ½ point to the same level.

Distressed roundup

Discount retailer 99 Cents Only Stores’ 11% notes due 2019 were up 3¾ points to 82, a trader said. The company announced increased sales and a smaller net loss in its year-end financial results released last Thursday.

Gold, copper and silver producer Freeport McMoRan Inc.’s 5.45% notes due 2043 were up ¾ point to 84½.

As crude oil futures fell, offshore drilling contractor Ensco plc’s 4½% notes due 2024 were up ½ point to 82½.

And Walter Investment Management’s 7 7/8% notes due 2021 were unchanged at 61¾.

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