Intelsat bonds bounce around on filing disclosures; energy issues keep firming; Valeant rebounds

By Paul Deckelman

New York, Dec. 2 – Intelsat SA’s bonds were gyrating around on Friday – the senior paper seen several points better but the junior paper down multiple points – after the communications satellite company disclosed in a regulatory filing that it had been in talks with some of its noteholders on possible exchange offers for their existing bonds – which never came to fruition.

In the energy arena, oil and natural gas names including EP Energy LLC, California Resources Corp. and Denbury Resources Inc. continued to ride the upside momentum of world crude oil prices, which firmed for a third straight session on Friday on investor expectations that planned OPEC and non-OPEC output cuts will give prices a boost.

Hospital operator Community Health Systems Inc.’s paper was seen sharply higher.

Canadian drug manufacturer Valeant Pharmaceuticals International, Inc. was also modestly on the rise, after having been pushed lower earlier in the week on reported difficulty with its asset-sale plans.

Intelsat active after filing

A trader said that he had seen “a lot of Intelsat activity,” after the Luxembourg-based communications satellite operator disclosed in a 6-K filing with the Securities and Exchange Commission that it had engaged in discussions with the holders of certain of its notes regarding possible exchange offers for those notes.

Specifically, it held discussions with the holders of its Intelsat (Luxembourg) SA 6¾% senior notes due 2018, its 7¾% senior notes due 2021 and its 8 1/8% senior notes due 2023.

It offered to exchange $350 in new notes and $600 in cash per $1,000 principal amount of the existing 2018 notes and $500 in new notes and $30 in cash per $1,000 principal amount of the existing 2021 notes

The company said in its filing that no agreements with respect to any transactions for those notes were reached, “but discussions are continuing with certain of the holders at this time. We continually evaluate ways to simplify our capital structure and opportunistically extend our maturities.”

The trader said that the bonds were “precipitously lower” versus recent levels.

He saw the 8 1/8% notes due 2023 were down 4 points “to – yeesh – 31.”

He observed that “it looked like the sub[ordinated] stuff was lower, but the other stuff was higher.”

He said the 6¾% notes due 2018, for instance, were up 3 points at 78 5/8 bid, while the 7¾% notes due 2021 were down 2¼ points to 32¾ bid, “all of them on heavy volume.”

Among the notes not involved in the discussions revealed in the filing, he said that the company’s Intelsat Jackson Holdings SA 7¼% notes due 2019 were up 1½ points to around 81½ bid, although he said “they were off their lows from [Thursday].”

A trader at another desk also saw the 7¼% notes better on the day, pegging them up 1 point at 82 bid, while the 6¾% notes, he said, “pushed up” to around the 79 mark, a nearly 3½ point improvement on the day.

But he also saw the 8 1/8% notes due 2023 sliding more than 4 points to around the 31 level.

Energy improvement continues

Energy names were once again mostly on the rise on Friday as crude oil prices firmed for a third consecutive session on the prospect that planned output curbs by members of OPEC and even by large non-OPEC producers such as Russia would help keep a floor under those oil prices.

Houston-based oil and natural gas exploration and production operator EP Energy’s 6 3/8% notes due 2023 were up 6¼ points on the day Friday to 78¼ bid, although a trader said that move had only come “on a handful of trades.”

He said that its 9 3/8% notes due 2020 were 3½ point gainers on the day at 90¾ bid, “on heavy volume” while its 7¾% notes due 2022 ended at 78 bid, another market source said – an 8 point jump on the session.

EP’s 8% notes due 2024, which had priced about two weeks ago at par, continued to firm smartly in the secondary, another trader said, seeing them go out at 105¾ bid, 106¼ offered – a gain of 1¼ points on the day.

California Resources’ 8% notes due 2022 gained 1¾ points on the day to close at 85 bid, a trader said, after having been “up big yesterday [Thursday] and the day before [Wednesday],” when the Los Angeles-based E&P company’s paper had shot up by 3 1/8 points and by 4¾ points, respectively.

Denbury Resources’ 5½% notes due 2022 were up a deuce on the day at 87 bid.

SM Energy’s 6¾% notes due 2026 notes were up 1¼ points to 104¼ bid.

The bonds were up as crude prices firmed for a third straight session on the OPEC agreement news.

The key U.S. crude grade, West Texas Intermediate for January delivery, was up 62 cents per barrel on the New York Mercantile Exchange, settling at $51.68 bid, after having gained $1.62 per barrel on Thursday and $4.21 per barrel on Wednesday.

Similar price gains were seen in the benchmark European grade, Brent crude for February delivery, trading on the London ICE Futures Exchange.

Healthcare getting better

In the healthcare sector, a trader said that Community Health Systems’ 8% notes due 2019 “were up sharply today,” seeing the bonds go home at 81¾ bid, up 3¼ points.

He saw the Franklin, Tenn.-based hospital operator’s 5 1/8% notes due 2018 about unchanged at 97¾ bid, on “just a handful of trades,” while its 6 7/8% notes due 2022 were up by ¼ point at 66 bid “on reasonable volume.”

A second market source saw Community Health’s 5 1/8% notes due 2021 up by ½ point at 91½ bid.

Valeant firms off lows

Valeant Pharmaceuticals’ paper “was up marginally,” a market source said, seeing the Laval, Que.-based drugmaker’s benchmark issue, its 6 1/8% notes due 2025 up ¼ point at 73 bid.

The company’s 5 3/8% notes due 2020 firmed by about ¼ point to finish at 82.

Its 6 3/8% notes due 2020 rose by ¾ point to 84½ bid, “and more of the same.”

Earlier in the week, the Valeant bonds had gotten hammered after the company indicated that it had been unable to structure a sale of one of its subsidiaries.

But “they get whipsawed by every little thing,” the trader said.

“They’re going to have to sell assets and when they do, they go [up] – but when they’re not getting enough for them, they go back down.

“They see-saw back and forth a lot.”

A trader at another shop meanwhile quoted the company’s 7½% notes due 2021 finishing lower, off 1¼ points at 84¼ bid.

A mixed bag

Elsewhere, Avaya’s 7% notes due 2019 lost 1 point to 87¼ bid.

J.C. Penney’s 8 1/8% notes due 2019 “bounced a little bit,” a trader said, up ¼ point to 108½ bid.

But he said that iHeartCommunications’ 14% notes due 2021 lost ¼ point to 38¼ bid, “on a couple of trades.”

The San Antonio-based broadcasting and outdoor advertising giant’s 10 5/8% notes due 2023 retreated by 1¼ points to 73¾ bid.

© 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.