Intelsat posts third-straight session of gains; Valeant ‘marginally’ better; Neiman continues rally

By Colin Hanner

Chicago, March 1 – The distressed market’s storyline on Tuesday largely continued on Wednesday, as the most active list gravitated toward Intelsat SA for the third-straight session, traders said, which were abandoning distressed territory and nearing closer to par levels.

Intelsat Jackson Holdings SA built on gains it had seen the past few sessions off news of a merger between the Luxembourg-based telecommunications satellite company and OneWeb, LLC.

One of its issues were the “busiest bonds in our universe,” one sellside trader said.

After dropping in several of its issues on Tuesday, Valeant Pharmaceuticals International, Inc. rebounded to post gains in two sets of its distressed issues, a trader said.

Another trader said the moves were marginal at best.

Franklin, Tenn.-based Community Health Systems, Inc. was up markedly on the session, a trader said, following the movement of fellow hospital groups, as well as remarks President Trump made about health care in a joint session speech to Congress on Tuesday night.

One of retailer Neiman Marcus Group, Inc.’s bonds was up a few round numbers on the session, building on a winning streak it has seen in the past week.

“Neiman keeps grinding higher, especially with what markets are doing today,” a trader said. For the first time, the Dow Jones Industrial Average surged past 21,000, and stocks were up across the board on an expectant interest rate hike and solidified optimism in an economy with President Trump at the helm.

Media company iHeartCommunications, Inc. was active, though only one issue moved higher on the day, GenOn Energy, Inc. was down a day following its parent company NRG Energy, Inc. announcing its fourth quarter results, and a handful of energy companies traded mixed on the first trading session of the month.

Intelsat continues trend

The merger between Intelsat and OneWeb has put creditors of Intelsat’s subsidiaries in a favorable spot as distressed bonds continued to tick higher on Wednesday.

“Everything was pretty active [again] to be quite honest,” a trader said, adding that Jackson-held bonds were up around 1 to 2 points across the board.

The Jackson-held 5½% notes due 2023 were up 1¾ points to 85¼, a trader said, adding that it was the “busiest bond” in the distressed realm.

The similarly held 7½% notes due 2021 were up ¾ point to 92¾, followed by the 7¼% notes due 2020, which posted a ½-point gain to finish at 93¾.

And the 7¼% notes due 2019 rounded out activity in the Jackson-held bonds. They were up 1/8 point to 96 5/8, a market source said.

Intelsat Luxembourg Holdings SA’s 7¼% notes due 2021 were up 1¾ points to 60½, a trader said. Another trader said that movement was closer to a 2-to-3 point gain on the day.

And Intelsat Connect Finance SA’s 12½$ notes due 2022 were up 5 points to 91 7/8 on a “ton of trades,” a trader said.

Valeant rebounds

Though the movement of Valeant Pharmaceuticals’ distressed bonds were debated on the session they were nonetheless up following fourth quarter results that weighed down on a series of issues.

The 6 1/8% notes due 2025 were up ½ point to 81, one trader said, though another trader said they were up marginally if anything, noting the 81 handle was “maybe a little better than where it was going out yesterday.”

The 6 3/8% notes due 2020 were up 1½ points to 92¼.

Fellow pharmaceutical company Concordia International Corp.’s 7% notes due 2023 were down ¼ point to 39¼, a trader said.

Community Health, hospitals up

A trader cited President Trump’s joint session speech to Congress on Tuesday night as the driver behind movement in the hospital sector on Wednesday, specifically in Community Health’s most popularly traded notes.

The 6 7/8% notes due 2022 were up 1 point to 89¼, a trader said, while another trader said the gain was more in the 1¼-to-1½-point range.

On Tuesday, Trump addressed Congress, iterating among other things an outline of steps to dismantle the Affordable Care Act.

“First, we should ensure that Americans with pre-existing conditions have access to coverage, and that we have a stable transition for Americans currently enrolled in the health care exchanges,” Trump said, which seemed to quell fears of a complete overhaul of the current system.

Trump also called for tax credits for health insurance coverage, resources for Medicaid, reduction in costs through legal reforms and the ability to buy health insurance over state lines.

Neiman ‘grinding’

Neiman Marcus Group’s distressed notes took a breather on Tuesday, but the 8% notes due 2021 were up 2 points to 64½ on Wednesday, a trader said.

Another trader said the notes continue to trend higher with equity markets and said the notes were up about 10 points in the last week.

iHeart active

iHeartCommunications was active on the session, though a few issues were unchanged, including the 9% notes due 2021, which remained with an 81¼ handle.

The 9% notes due 2019 were up 3/8 point to 88, while the 14% notes due 2021 were a little better, trading just north of 39, a trader said. Another trader said the 14% notes were up 7/8 point to 39 5/8.

Distressed mixed bag

Following fourth quarter results that were below market expectations, Frontier Communications Corp.’s 9% notes due 2031 were up ½ point to 89¾, a trader said.

Two sets of GenOn Energy’s distressed bonds were down on the session.

The 7 7/8% notes due 2017 were down 1 point to 77½, while the 9 7/8% notes due 2020 were down 1/8 point to 73 5/8.

St. Clairsville, Ohio-based Murray Energy Corp.’s 11¼% notes due 2021 were up 1 point to 80¾, a trader said.

Exploration and production company California Resources Corp.’s 8% notes due 2022 were up 1 point to 86.

Global shipper Navios Maritime Holdings, Inc.’s 8 1/8% notes due 2019 were up ¼ point to 85 1/8.

And independent power producer Talen Energy Corp.’s 6½% notes due 2025 were up 1 to 83½.

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