FirstEnergy Nuclear active as federal protection sought against closures; Community Health trades after asset sale

By James McCandless

San Antonio, March 29 – Traders reported a light half-day in activity for the distressed debt market as bond markets closed early Thursday for the long weekend.

FirstEnergy Solutions Corp. subsidiary FirstEnergy Nuclear Generation Corp.’s notes became active as it seeks an emergency order from the Department of Energy to keep certain nuclear and coal-powered plants open as they face premature closure.

Issues in Community Health Systems, Inc. traded heavily again after the company announced late Tuesday that an agreement had been signed to sell three hospitals to West Tennessee Healthcare, Inc.

Windstream Holdings, Inc. finished the week with its paper active, still trading off of Tuesday’s news that it completed the acquisition of networking solutions name MASS Communications.

Frontier Communications Corp. and Intelsat SA continued to lead in the distressed telecom sector. A mixed day for oil futures spurred activity in Northern Oil and Gas, Inc. and Talen Energy. Revlon, Inc. continued to keep its position atop the retail sector.

FirstEnergy seeks emergency order

Reports confirmed that after filing a deactivation notice for three of its nuclear-powered plants Wednesday, Akron, Ohio-based electricity producer FirstEnergy sought an emergency order from U.S. Secretary of Energy Rick Perry that would force PJM Interconnection, a regional transmission organization in the Northeast, to enter negotiations that would work to keep the plants economically viable and operational in the long term. The company has labeled the plants as “at-risk” due to low profitability, citing low energy prices.

The 6.05% notes due 2021 rose about 1¼ points to close around 32½ bid. The 6.8% bonds due 2039 jumped about 3¾ points to close at 32½ bid.

Community Health leads again

Franklin, Tenn.-based hospital operator Community Health Systems saw issues close the week on top, traders confirmed. In its latest in an ongoing series of maneuvers to combat its debt problem, the company announced Tuesday that an affiliate of the company had signed a definitive agreement to sell three Tennessee hospitals to Jackson, Tenn.-based hospital company West Tennessee Healthcare. The sale is expected to finalize in the second quarter of 2018.

Earlier this year, the company informed shareholders that asset sales and other actions were on the table in order to reduce its debt.

The 7 1/8% issues due 2020 rose about ½ point to close just below 82¼ bid. The 6 7/8% issues due 2022 gained about ¼ point to close above 57¾ bid.

Windstream trades

Little Rock, Ark.-based communications solutions name Windstream saw paper active toward the end of the week, a market source said. 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% paper due 2021 shaved off about ½ point to close at around 73 bid. The 6 3/8% paper due 2023 rose about ¾ point to close at 57¼ bid.

Volume names active

Norwalk, Conn.-based wireline telecom name Frontier Communications notes closed the week active as ever, trading off of recent positive news that it has shuttered its quarterly dividend in favor of debt service.

The 7 5/8% notes due 2024 lost about ¼ point to close at around 62½ bid. The 10½% notes due 2022 were active but kept level at about 84 bid. The 11% notes due 2025 gained about ½ point to close just above 76 bid.

Luxembourg-based satellite communications company Intelsat was another active telecom name closing the week.

The Intelsat Jackson SA 5½% issues due 2023 traded up ½ point to close at 81 bid. The 7¼% issues due 2020 crashed about 8½ points to close at 83¾ bid.

Distressed energy names traded on a mixed day for oil futures.

Minntonka, Minn.-based independent oil and gas producer Northern Oil and Gas saw its 8% paper due 2020 fall about 1 point to close at around 93 bid.

Allentown, Pa.-based independent energy producer Talen Energy’s 6½% notes due 2025 fell about 1 point to close just below 70 bid.

“We didn’t really expect much to happen today,” a trader said. “It was a really quiet week with a few surprises here and there. Holiday weeks are always dead and this one was no different.”

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