Intelsat Jackson bonds jump on word of an exchange offer; Peabody Energy debt continues to gain ground

By Stephanie N. Rotondo

Seattle, Aug. 30 – The big news for the distressed debt market on Tuesday was word that Intelsat SA had launched a private exchange offer for its 6 5/8% notes due 2022.

However, a trader noted that the exchange was for the $142 million tranche of the notes linked to Intelsat Jackson Holdings SA.

“So it’s not like there is a lot of it,” he said.

Still, the paper jumped as much as 15 points to trade as high as 87, he said.

“It’s a nice deal for them,” he remarked, as holders who participate in the exchange by the early deadline will receive $705 of new 8% notes due 2024 plus $120 in cash.

After the early deadline – 11:59 p.m. ET on Sept. 12 – holders will receive the same amount of new notes and $100 in cash.

The trader also pointed out that “Luxco” paper – such as the 7¾% notes due 2021 – moved up a point to trade “around 30.”

At another desk, a market source said the 6 5/8% notes were up 12½ points at 86 bid.

The exchange announcement came just one day after the Luxembourg-based commercial satellite services provider said that talks regarding a debt swap with holders of the 6¾% notes due 2018 had broken down.

On July 15, Intelsat Jackson bought back $673.454 million of the 6 5/8% notes at the discounted price of $687.50 per each $1,000 of notes. Prior to that tender – which was oversubscribed – there were $815.25 million of the notes outstanding.

Peabody climbs up

Away from Intelsat, a trader said there continued to be strength in Peabody Energy Corp. bonds.

“They are screaming,” he said, seeing the 10% notes due 2022 rising to 33 versus levels around 30 on Monday.

The bankrupt coal producer recently inked self-bonding deals with four states – news that resulted in an upward move for the debt. But the bonds had been creeping up even before then, with no apparent catalyst.

The trader speculated that a rise in metallurgical coal could be the driving force behind the gains. He also opined that perhaps the market’s overall sentiment on coal companies was starting to turn positive.

He noted that sector peer Murray Energy Corp. saw its debt heading upward in the last couple of weeks, in the wake of the company’s Aug. 15 earnings release.

As the company is private, those results are not available to the public.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.