Intelsat ticks up on another quiet day; Peabody drops wildly, but on low volume; Valeant, Neiman down

By Colin Hanner

Chicago, Jan. 27 – Traders pointed to the arrival of new issues in the regular high-yield as the focal point on Friday, but the distressed arena saw some activity, albeit lower than previous sessions in the week.

Luxembourg-based Intelsat Jackson Holdings SA, which has seen a reversal over the past few days with a turnaround toward solid increases, continued the pattern on Friday, led by two issues that saw upticks.

Valeant Pharmaceuticals International, Inc. traded down marginally on the session, two days after rumors picked up about a potential asset sale.

After those issues, volume was “already getting thin,” a trader said.

St. Louis-based coal company Peabody Energy Corp. announced late Thursday that its disclosure statement for its plan of reorganization was approved by the U.S. Bankruptcy Court, and the company’s unsecured notes – though trading low in volume and not representative of the securities’ overall health, a trader said – touched some unheard of lows during trading.

Neiman Marcus Group, Inc. reverted to negative territory in one of its securities after a series of reversals throughout a tumultuous week for the retailer.

A series of iHeartCommunications, Inc. notes were up modestly on the day, Navios Maritime Holdings, Inc. saw a multi-point bump in two sets of securities and several one-off names rounded up an overall quiet day in the distressed market, traders said.

Intelsat continues rise

If an upgrade by RBC Capital in Intelsat SA’s equites to outperform seemed to influence its distressed securities on Thursday, as one trader said in a previous session, then its effects seemed to continue on Friday.

Intelsat Jackson Holdings SA’s 7¼% notes due 2019 were up 5/8 point to 83 7/8, a trader said. A market source said the same notes traded up ½ point to 84.

The big move occurred in the 7¼% notes due 2020, which were up 2½ points to 76¾.

Valeant down, Community Health flat

The week for Valeant Pharmaceuticals saw the rise of continued rumors that the company had been fielding queries for its assets to reduce its debt load.

And, for the second-straight day, its distressed securities were down modestly.

The 6 3/8% notes due 2020 were down ½ point to 88½, a market source said, while the 6 1/8% notes due 2025 were down 3/8 points to 75 5/8.

In healthcare, Community Health Systems, Inc.’s 6 7/8% notes due 2022 were unchanged at 73, a slowdown for a note that had climbed several points in the past two sessions.

No apples-to-apples in Peabody

Though no doubt down on the day, a trader said there was some confusion in Peabody’s 6½% notes due 2020 and said the “high 20” handle they carried – a 20-point downswing from Thursday’s session – was hard to compare “apples-to-apples” with the previous day’s handle.

The confusions, he said, lay in what people thought they were getting as it related to the news before and after of the disclosure statement of the reorganization plan was agreed upon.

The trader said the notes even printed in the “10s” area, a possible 40-point downswing from a day prior.

Under the plan of reorganization, current Peabody Energy equity securities will be canceled, and holders will receive no distribution.

Holders of unsecured debenture claims will receive no distribution until holders of general unsecured claims are paid in full.

Peabody’s equity price was down $1.08, or 37.9%, to $1.77 on the day.

The company will now start soliciting votes from creditors, according to a news release.

The court also approved the company’s plan support agreement and other related agreements.

Neiman retreats

Neiman Marcus Group, like other brick-and-mortar retailers, has been under the scope recently as retail spending is shifting toward online shopping.

After a down-then-up-then-quiet week, Neiman’s 8% notes due 2021 were down 1½ points to 63¾ on a half-dozen trades, a trader said.

Meanwhile, tween retailer rue21, Inc.’s 9% notes due 2021 traded up 3/8 point to 19, a market source said.

iHeart beats higher

“iHeart continues to move up,” a trader said on Friday, after remaining somewhat muted on Thursday’s session.

The 14% notes due 2021 were trading close to 38, up “let’s call it ¾ point,” a trader said. Another trader said the same notes were up ½ point to the same handle.

Navios finds wind

Global shipper Navios Maritime saw an increase in two sets of its distressed securities on the session, a trader said.

The 7 3/8% notes due 2022 were up 1¾ points to 65¼, a trader said, while the 8 1/8% notes due 2019 were up ¼ point to 77¾.

There were no apparent drivers of the movement.

Navios’ stock price was down 9 cents, or 4.39%, to $1.96 on the day.

One-off’s mixed

Mortgage banking firm Walter Investment Management Corp.’s 7 5/8% notes due 2021 were down 3/8 point to 81¾, a trader said.

Hydrocarbon refiner and processor Calumet Specialty Product Partners, LP’s 6½% notes due 2021 were up 1½ points to 86½.

Peter Heap contributed to this review

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