Intelsat amends, extends exchange offer, bonds tick higher; Valeant up; E&P mixed on low-volume session

By Colin Hanner

Chicago, May 18 – It was a low-liquidity session in the distressed market on Thursday, a trader said, with Intelsat SA leading movers on the session following yet another exchange offer deadline extension, pushing back a previously set Thursday evening deadline.

In the distressed space as a whole, a trader said that just over $1 billion changed hands.

Late Wednesday, Intelsat further amended its debt exchange offers in addition to pushing back the deadline to late May. Bonds were several points higher on the day.

In health and pharmaceuticals, Valeant Pharmaceuticals International Inc. was higher fractionally in one of its issues, as was Community Health Systems, Inc.

For the second-straight session, crude oil futures rose slightly, inching nearer to the $50 a barrel benchmark, and distressed exploration and production companies were mixed.

California Resources Corp. and Atwood Oceanics Inc. were both lower on the day, a trader said.

Across the airwaves, Frontier Communications Corp. and iHeartCommunications, Inc. moved in opposite directions.

Intel amends exchange offer

A market source’s suggestion that talks were taking place between Intelsat and bondholders on Wednesday proved right on Thursday, when the satellite telecommunications company amended terms of an exchange offer that has been pushed back several times.

Its bonds responded, especially Intelsat Jackson Holdings SA’s 5½% notes due 2023, which were up 3 points to 85½, a market source said.

As per the amendments of the exchange offer, the 5½% notes due 2023 were dropped from the exchange offer, as $7,629,000, or 0.38%, of those notes had been tendered for exchange.

Similarly-held 7¾% notes due 2021 were up 1¼ points to 55.

Intelsat Luxembourg Holdings SA’s 8 1/8% notes due 2023 were up ¼ point to 54.

And Intelsat Connect Finance SA’s 12½% notes due 2022 were up ¾ points to 89.

The latest amendments increase the aggregate consideration to be received by noteholders following the closing of Intelsat’s combination with WorldVu Satellites Ltd. (OneWeb); extend the expiration time for each of the exchange offers and each of the related consent solicitations to midnight ET at the end of the day on May 31 from 5 p.m. ET on May 18; and extend the withdrawal deadline for each of the offers and consent solicitations to 11:59 p.m. ET on May 31 from 4:59 p.m. ET on May 18.

In health and pharma

Continuing to inch higher on the week, Valeant saw another gain on the day.

Its 5 7/8% notes due 2023 were up ¼ point to 81½, a trader said.

In the hospital sector, Franklin, Tenn.-based Community Health’s 6 7/8% notes due 2022 were up 3/8 point to 87 3/8.

E&P mixed

Though crude has staged a minor rally in the past two sessions, E&P names were not as quick to follow as they have been in past sessions.

Atwood Oceanics’ 6½% notes due 2020 were down 2½ points to 87½, a market source said.

Offshore drilling contractor Transocean Ltd.’s 6.80% notes due 2038 were down 1 point to 77½.

California Resources’ 8% notes due 2022 were down 1 point to 75½.

And Denbury Resources Inc.’s 6 3/8% notes due 2020 were down 1½ points to 76.

Away from oil, private coal producer Murray Energy Corp.’s 11¼% notes due 2021 were down ¼ point to 73.

Airwaves down

Telecommunications company Frontier Communications Corp. rebounded on the session, gaining ¼ point in its 7 1/8% notes due 2023, which finished at 85.

And iHeartCommunications’ 9% notes due 2019 were down 1¾ points to 78¾.

The exchange offer deadline for those notes still remains 5 p.m. ET on May 26, pushed back two weeks from 5 p.m. ET on May 12 previously.

Wendy Van Sickle and Marisa Wong contributed to this review

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