Intelsat notes active after bankruptcy filing; Endo flat to slightly up amid exchange

By James McCandless

San Antonio, May 14 – In Thursday’s distressed debt market, the focus shifted to newsmakers in telecom and pharmaceuticals.

Intelsat SA’s notes varied after the company filed for bankruptcy to shore up liquidity ahead of a C-band spectrum auction.

Sector peer Frontier Communications Corp.’s issues also saw mixed results.

In the pharma space, Endo International plc’s paper diverged as three of its subsidiaries start an exchange offer.

Generics producer Mallinckrodt plc’s notes were under pressure.

Positive oil futures were followed by Valaris plc’s issues while Occidental Petroleum Corp.’s and Whiting Petroleum Corp.’s paper drifted in different directions.

Meanwhile, REIT Uniti Group Inc.’s notes differed in direction in the wake of its Q1 earnings report.

Mall-focused property name Washington Prime Group Inc.’s issues ended with a decline.

Intelsat, Frontier in focus

Intelsat’s notes varied in direction as Thursday came to a close, traders said.

The 9½% senior notes due 2024 rose 3¾ points to close at 21 bid. Intelsat Jackson Holdings SA’s 8¼% senior notes due 2024 fell 3¾ points to close at 61¼ bid.

The two tranches combined to see about $43 million change hands by the end of the afternoon.

Early Thursday, the Luxembourg-based satellite operator and some of its subsidiaries filed Chapter 11 bankruptcy to complete a financial restructuring and enhance liquidity that will likely result in a substantial reduction of its legacy debt burden, Prospect News reported.

One of the main reasons for the filing given was that the company wanted to participate in the accelerated clearing of C-band spectrum as ordered by the Federal Communications Commission, which would require more than $1 billion in related spending.

Participating would help the company meet eligibility to take part in a December spectrum auction, likely resulting in about $4.87 billion in revenues.

“The bankruptcy is going to be messy,” a trader said. “There are so many moving parts and it looks like the creditors will be in control by the end of it.”

Norwalk, Conn.-based wireline communications name Frontier’s issues also saw mixed results.

The 10½% senior notes due 2022 picked up 2½ points to close at 32¾ bid. The 11% senior notes due 2025 shed 1½ points to close at 30½ bid.

Endo flat to higher

In the pharmaceuticals space, Endo’s paper diverged, market sources said.

The 6% senior notes due 2025 held level at 73¾ bid. The 6% senior paper due 2023 tacked on ¼ point to close at 77½ bid.

During the Thursday session, the Dublin-based drug maker’s subsidiaries Par Pharmaceutical, Inc., Endo DAC, Endo Finance LLC and Endo Finco Inc. began exchange offers for three series of its senior notes, Prospect News reported.

The group plans to exchange up to $400 million of 7½% new first-lien senior secured notes due 2027 issued by Par Pharmaceutical, up to $1,110,440,000 of new 9½% second-lien secured notes due 2027 issued by Endo DAC, Endo Finance and Endo Finco and up to $2,707,766,000 of new 6% senior notes due 2028 issued by Endo DAC, Endo Finance and Endo Finco.

Last week, the company beat first-quarter earnings estimates with its 95 cents per share profit and $820.41 million in revenues.

Staines-upon-Thames, England based generics producer Mallinckrodt’s notes were under pressure.

The 4¾% senior notes due 2023 gave up 3¼ points to close at 22¼ bid.

Oil futures gain

In oil and gas, oil futures pushed higher as distressed tranches drifted in different directions, traders said.

Market sentiment was positive on crude after the International Energy Agency forecasted lower global crude stockpiles in the second half of the year.

West Texas Intermediate crude oil futures for June delivery garnered $2.27 to settle at $27.56 per barrel.

North Sea Brent crude oil futures for July delivery finished at $31.13 per barrel after a $1.94 spike.

London-based contract driller Valaris’ issues followed the trajectory of futures.

The 5.2% senior notes due 2025 improved by ¼ point to close at 6¼ bid. The 7¾% senior notes due 2026 added ½ point to close at 6½ bid.

Houston-based independent oil and gas producer Occidental Petroleum’s paper varied.

The 2.9% senior paper due 2024 was docked 2 points to close at 74½ bid. The 2.7% senior notes due 2022 were lifted ¾ point to close at 86 bid.

Denver-based producer Whiting Petroleum’s notes also took different paths.

The 6¼% senior notes due 2023 shaved off ½ point to close at 6½ bid. The 6 5/8% senior notes due 2026 closed level at 7 bid.

Uniti notes eyed

Meanwhile, property name Uniti’s issues moved slightly from opening levels but in different directions, market sources said.

The 7 7/8% senior secured notes due 2025 rose ¼ point to close at 100¼ bid. The 8¼% senior notes due 2023 dipped ½ point to close at 91¼ bid.

The Little Rock, Ark.-based telecom-focused real estate investment trust’s structure has seen increased attention this week after the company issued its earnings report for the first quarter.

The company’s earnings were a 45 cents per share profit, higher than the 42 cents per share consensus estimate.

Revenues also outperformed at $266.16 million.

On Wednesday, news broke that court approval had been granted on a settlement that resolves claims and causes of action between the Uniti and Windstream Holdings, Inc.

Columbus, Ohio-based shopping mall name Washington Prime’s paper ended the day with a decline.

The 6.45% senior notes due 2024 slid 2 points to close at 57 bid.

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