Jones Energy notes rise following executive firings; Intelsat paper mixed in secondary

By James McCandless

San Antonio, April 17 – The distressed debt market saw a slight uptick in activity on Tuesday, according to traders, as the equity markets had another positive day.

Jones Energy, Inc.’s notes traded higher as the company announced the terminations of its chief executive officer and president after investor pressure.

Intelsat SA’s issues were mixed and active a day after subsidiary Intelsat General was placed on a team of companies developing a satellite payload for the Federal Aviation Administration.

Community Health Systems, Inc.’s paper slid. The company announced a round of corporate layoffs last week in its latest effort to tackle its debt.

Frontier Communications Corp.’s notes rose as the company seeks a buyer for certain assets. FirstEnergy Solutions Corp.’s issues were mixed as the company awaits a decision from the government concerning aid for at-risk plants. California Resources Corp.’s paper ended mixed on a positive day for oil futures.

Jones fires executives

Austin, Texas-based independent oil and gas producer Jones Energy saw notes rise after reports confirmed that it has terminated chief executive officer Jonny Jones and president Mike McConnell effective immediately. The company had been receiving pressure for a leadership change from activist firm Q Investments.

“They’ve been buying up shares for a while,” a trader said. “They eventually got someone on the board and they’ve been pushing for this kind of change.”

The 9¼% notes due 2023 rose about ¾ point to close at around 58¾ bid. The 6¾% notes due 2022 gained 2 points to close at 57¾ bid.

Intelsat mixed

Luxembourg-based satellite communications company Intelsat saw its issues mixed on the day, traders confirmed, after the company announced Monday that the FAA had put subsidiary Intelsat General on a team of companies with a task order of developing and operating a satellite payload to aid aircraft navigation.

The Intelsat Jackson SA 5½% notes due 2023 edged up ¼ point to close at 84¾ bid. The 7¼% notes due 2020 dropped about ¾ point to close at around 97¼ bid.

The 5½% notes gained 1¼ points and the 7¼% notes gained about 2¼ points on Monday.

Community Health drops

Franklin, Tenn.-based hospital operator Community Health Systems paper fell, a market source confirmed. Last Thursday, the company announced a round of corporate layoffs, letting go of at least 70 employees in its latest effort to manage its debt.

The company has also made asset sales as another part of its debt reduction plan, selling four hospitals with more potential sales on the table.

The 7 1/8% paper due 2020 lost about 2 points to close at 82 bid. The 6 7/8% paper due 2022 fell ¾ point to close at 57 bid.

On Monday, the 7 1/8% paper gained 1 point while the 6 7/8% paper lost ½ point.

Volume names trade

Elsewhere in telecom, Norwalk, Conn.-based wireline telecom Frontier Communications’ notes rose as the company continues the search for buyers for certain assets.

The 7 5/8% notes due 2024 jumped up about 1 point to close at 65¼ bid. The 10½% notes due 2022 gained 1¾ points to close at 88½ bid. The 11% notes due 2025 rose ¼ point to close at 78½ bid.

FirstEnergy Solutions, a subsidiary of Akron, Ohio-based electricity producer FirstEnergy Corp., saw issues mixed as the government continues to deliberate over whether or not to render aid to at-risk power plants.

The 6.05% notes due 2021 lost about ¼ point to close at around 31¾ bid. The 6.8% bonds due 2039 remained level at 32 bid.

Amid gains for oil futures, Los Angeles-based independent oil and gas name California Resources saw paper mixed on Tuesday.

The 6% paper due 2024 fell 2 points to close at 70¼ bid. The 8% paper due 2022 gained about 1 point to close at around 86½ bid.

“We definitely had a bit of a better day than most recent days,” a trader said. “But I’m not sure if this pattern is going to hold. There is still a lot of uncertainty that is holding some people back.”

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