Community Health continues trading after hospital sales; Windstream remains active after acquisition

By James McCandless

San Antonio, March 28 – Traders reported a third straight slow day in the distressed debt market on Wednesday as they prepared for the long weekend, with little activity expected in Thursday’s half day.

Community Health Systems, Inc. notes led the session again after the company announced Tuesday evening that an agreement had been signed to sell three hospitals to West Tennessee Healthcare, Inc.

Issues in Windstream Holdings, Inc. saw a second day of activity. On Tuesday, it announced the completed acquisition of networking solutions company MASS Communications.

Talen Energy paper became active as the company gears up to release fourth quarter and total year numbers.

Frontier Communications Corp. and Intelsat SA remained at the top of the telecom space. Mallinckrodt plc was another dominant name in the healthcare sector. Sears Holdings Corp. and Revlon, Inc. remained leaders in volume for the distressed retail space.

Community Health sells hospitals

Franklin, Tenn.-based hospital operator Community Health Systems notes were actively traded again Wednesday, traders confirmed, as the company announced late Tuesday that an affiliate of the company had signed a definitive agreement to sell three Tennessee hospitals to Jackson, Tenn.-based hospital company Western Tennessee Healthcare. The sale is expected to become final in the second quarter of 2018.

The company had cautioned shareholders to expect asset sales as part of its overall plan to decrease debt and has subsequently made several maneuvers towards that goal.

“There are more on the way,” a trader said. “But there doesn’t seem to be a fixed timeline for selling these assets.”

The 7 1/8% notes due 2020 traded up ½ point to close at 81¾ bid. The 6 7/8% notes due 2022 rose about ½ point to close at around 57½ bid.

Windstream completes acquisition

Little Rock, Ark.-based communications solutions name Windstream issues were active a second day Wednesday, a market source said, after reports confirmed Tuesday that the company had completed a $37.5 million cash acquisition of New York City-based networking solutions company MASS Communications, Inc.

The 7¾% issues due 2021 lost about ¾ point to close at around 73½ bid. The 6 3/8% issues due 2023 traded down about 1¼ points to close at just above 56½ bid.

Talen Energy trades

Paper in Allentown, Pa.-based independent energy producer Talen Energy became active as the company prepared to release its Q4 and total 2017 earnings report, traders confirmed.

“That was one of the big movers today, especially since oil futures were off today,” a trader said.

The 6½% paper due 2025 cratered 6½ points to close at 71 bid. The 7% paper due 2027 lost about 4 points to close at just above 72 bid.

Volume names active

Norwalk, Conn.-based wireline telecom name Frontier Communications notes continued to trade on recent positive news, such as its decision to halt its quarterly dividend to focus on debt service.

The 7 5/8% notes due 2024 fell ½ point to close at 62¾ bid. The 10½% notes due 2022 jumped up 1 point to close at 84 bid. The 11% notes due 2025 dropped about 1 point to close just under 75½ bid.

Luxembourg-based satellite communications company Intelsat also added volume to the telecom space.

The Intelsat Jackson SA 5½% issues due 2023 lost about ¼ point to close at 80½ bid. The 7¼% issues due 2020 shaved off about ½ point to close at just above 92¼ bid.

Elsewhere in healthcare, Britain-based drug maker Mallinckrodt continued to trade in high volume.

The 4¾% paper due 2023 traded up about 2 points to close at around 79½ bid.

Hoffman Estates, Ill.-based department store chain Sears saw its 6 5/8% notes due 2018 lose about 2 points to close at just above 67 bid. The 8% notes due 2019 traded down 3 points to close at 28 bid.

New York City-based cosmetics producer Revlon saw more trading.

Its 5¾% notes due 2021 rose about 1 point to close at around 77¾ bid. The 6¼% notes due 2024 lost about 2 points to close at 61¾ bid.

“There was really nothing going on today,” a trader said. “It’s at a standstill with the half day coming.”

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