Frontier leads with slight gain; Valeant ‘wildly active’; Intelsat pares losses; Concordia up on earnings

By Colin Hanner

Chicago, May 10 – Activity in the distressed debt market saw movement circled around names of sessions past on Wednesday, a market source said, with Frontier Communications Corp. leading the volume in the secondary market.

Valeant Pharmaceuticals International, Inc. was “wildly active” following the release of its first quarter earnings on Tuesday and was up another several points across numerous issues, a trader said.

With an exchange deadline set for midnight ET on Wednesday, Intelsat SA’s subsidiary bonds pared losses from the previous session.

Earnings from Concordia International Corp. caused an uptick in its bonds on Wednesday, as its equities dropped by nearly one-third.

In the exploration and production sphere, crude oil futures rebounded off Energy Information Administration figures that showed U.S. crude inventories falling several million barrels.

California Resources Corp. and Ensco plc were higher because of the movement.

Talen Energy Corp. had several issues that remained in the mix ahead of its earnings, and Hertz Global Holdings Inc. rebounded after falling to its quarterly earnings on Tuesday.

Frontier leads

Seeing volume of $70 million-plus, Frontier Communications’ 11% notes due 2025 were up 3/8 point to 92 5/8, a trader said.

A day prior, the notes were down 2 1/8 points.

The telecommunications company’s 7 1/8% notes due 2023 were up 5/8 point to 81¼.

Since its first quarter earnings last week, which fell below market expectations, Frontier bonds have steadily fallen compared to pre-earnings levels.

Valeant ‘wildly active’

After a surprising turnaround in its first quarter results, Valeant continued to rake in gains on Wednesday.

The 7% notes due 2020 were up 2¼ points to 95½, a trader said.

Its 6 1/8% notes due 2025 were up 2 1/8 points to 80¼, followed by its 5 7/8% notes due 2023, which were up 2 points to 80 7/8.

And its 6 3/8% notes due 2020 were up 1½ points to 94¼.

Investors had plenty to be upbeat about on Tuesday after the company announced it adjusted its EBITDA guidance to a $3.6 billion to $3.75 billion range from a $3.55 billion to $3.75 billion range, as well as a $1.6 billion reduction in its debt on the quarter.

Intelsat pares losses

With an exchange offer deadline looming at midnight ET, Intelsat Jackson Holdings SA’s 7¼% notes due 2021 were up ½ point to 92½.

And Intelsat Luxembourg Holdings SA’s 8 1/8% notes due 2023 were up 1½ points to 53¼.

Both issues were down more than 4 points each on Tuesday after Intelsat was “keeping the swap terms unchanged” on its exchange offer, a market source said.

Concordia up on lackluster earnings

The Canadian pharmaceutical company’s 9% notes due 2022 were the most active issue for Concordia and were up 1 3/8 points to 74½.

Its 7% notes due 2023 were up 3 points to 23, while its 9½% notes due 2022 were unchanged at 87¼.

Among its notable first quarter results, the company reported revenue of $160.6 million for the first quarter, down $9.8 million from the previous quarter and $67.9 million lower year-over-year.

Adjusted EBITDA was $84.2 million, compared to $80.5 million from the previous quarter and $140.8 million in the same period last year.

Concordia has $336.2 million cash on hand, with regard to its debt agreements, and has $60 million available under its revolving credit facility before covenants occur.

Concordia’s stock was down 63 cents, or 30.18%, to $1.45.

E&P higher

Crude oil was up several points on the day after the EIA reported a drop of 418,000 barrels per day, compared to the previous week’s average.

With that, several distressed E&P followed oil’s rise.

California Resources’ 8% notes due 2022 were up 1½ points to 76 1/8, a trader said.

And offshore driller Ensco plc’s 5.20% notes due 2025 were up 1 point to 85½.

Distressed wrap

Hertz Global’s 7 3/8% notes due 2021 were up ½ point to 93½, a trader said, a rebound from Tuesday’s losses following its earnings report.

Ahead of its earnings, which were held after close on Wednesday, Talen Energy’s 6½% notes due 2025 were down 1 point to 72¾, while its 4.6% notes due 2021 were down ½ point to 73½.

Music retailer Guitar Center, Inc.’s 6½% notes due 2019 were up 1 point to 88¼.

And private coal company Murray Energy Corp.’s 11¼% notes due 2021 were down ¼ point to 74½.

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