iHeart trades higher after exchange deadline pushed back again; E&P lower after OPEC deal; Dynegy sideways

By Colin Hanner

Chicago, May 25 – The distressed debt market was winding down ahead of the holiday weekend, a market source said, with activity trending toward similar issues seen in the past few sessions. Focus was on new issues in the high-yield market, particularly NOVA Chemicals Corp.’s $2.1 billion two-tranche deal.

“It’s getting sleepier heading into the weekend,” a market source said.

Seeing mild gains – it had been trending higher in the past few sessions – iHeartCommunications, Inc. saw yet another extension on an exchange deadline for several of its notes and term loans and responded positively.

The exploration and production sector was off with the price of oil, which pared the gains of the last few sessions as the Organization of Petroleum Exporting Countries settled on a deal to extend the production cuts, though did not plan on changing the production limits.

California Resources Corp. and Denbury Resources Inc. were both more than a point lower on the session.

Dynegy Inc. remained active, but was sideways on the session, and volume dropped off immensely for GenOn Energy Inc., which had been moving in both directions due to a PJM Interconnection Capacity Auction on Tuesday, as well as a restructuring agreement reached that same day.

Intelsat SA’s subsidiaries continued to move higher on the day, mirroring similar gains to Wednesday.

iHeart rebounds on offer pushback

iHeartCommunications, Inc. extended its private exchange offers for five series of priority guarantee notes and senior notes due 2021 on Thursday.

This is the sixth time the offer has been extended, going back to April 14.

Included in the offer are the 9% notes due 2022, which were up ½ point to 73¼, a market source said.

The 14% notes due 2022, which were not included in the exchange offer, had been as low as 23 and were hovering around a 24½ to 25 handle on the session, a trader said.

The company said it was making the extension so that it could continue discussions with holders of its notes and loans.

As of 5 p.m. ET on May 24, investors had tendered about $47.1 million, or 0.6%, of the outstanding notes, according to a company update on Thursday.

The exchange will now continue until 5 p.m. ET on June 9, extended from 5 p.m. ET on May 26.

In exchange for the priority guarantee notes, the company is now offering $900 principal amount of new notes for each $1,000 principal amount of notes if there is either low or medium turnout. Before the change, the company was offering $830 principal amount of new notes for medium participation and $880 principal amount of new notes for low.

E&P lower

Since reaching a deal last November to curb a global oil glut, OPEC has done little to quell fears in the broader commodity market, with gains erasing since the deal coming as recently as two weeks ago.

On Thursday, OPEC and some non-OPEC members agreed to extend cuts for nine more months, though the market was not convinced.

West Texas Intermediate crude oil was down nearly 5% to just under $48 a barrel, and distressed oil and oil-related companies followed.

California Resources’ 8% notes due 2022 were down 1 point to 77, a trader said.

Denbury Resources’ 6 3/8% notes due 2021 were down 1 point to 77.

And Canadian oil sands company MEG Energy Corp.’s 7% notes due 2024 were down ¾ point to 75, a market source said.

Energy lower

Two sessions following PJM Interconnection Capacity Auction, which drove home that there is capacity for electricity where there is not demand in the coming years, energy producers were not nearly as active on the day.

Dynegy’s 7 5/8% notes due 2024 were “sideways” at 96, a market source said.

GenOn Energy saw “little activity today” with its 9 7/8% notes due 2022 trading down ¼ point to 72¾.

Talen Energy Corp.’s 6½% notes due 2025 were up ¾ point to 75.

Intel continues ticking

The satellite telecommunications company continued to tick higher on Thursday, nearly mirroring gains from Wednesday, though Intelsat Luxembourg Holdings SA’s 7¾% notes due 2021 were up to 59¾, a 2-point rise on the day.

Intelsat Jackson Holdings SA’s 7¼% notes due 2020 were up ½ point to 93.

Susanna Moon contributed to this review

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