Digicel notes lower as market anticipates new issue; Uniti notes decline on ratings downgrade

By James McCandless

San Antonio, March 7 – Thursday’s distressed market session saw another day of softness.

Digicel Group Ltd.’s notes were lower as the market anticipated a $600 million pricing of senior secured notes.

Sector peer Intelsat SA’s issues were mixed as the week’s negative stories surrounding the C-band spectrum weigh on the company.

Real estate investment trust Uniti Group Inc.’s paper was in decline after a ratings downgrade centered on its connection with bankrupt Windstream Holdings, Inc., which saw its notes also trend negative.

As oil futures rose, California Resources Corp. issues were under pressure while Ensco plc’s paper was mixed.

Amid turmoil in the retail space, Neiman Marcus Group, Inc.’s notes fell while Revlon, Inc.’s issues ended the day mixed.

Dean Foods Co.’s paper continued on a downward slope.

Digicel lower, Intelsat mixed

In the telecom space, Digicel’s notes closed Thursday lower, traders said.

The 6¾% notes due 2023 lost ¾ point to close at 72½ bid. The 8¼% notes due 2022 dropped 2¼ points to close at 29¾ bid.

On Thursday afternoon, the Kingston, Jamaica, mobile phone network provider priced an upsized $600 million issue of five-year first-lien senior secured notes at par to yield 8¾%, Prospect News reported.

The deal had been pegged at $550 million on Wednesday.

“That’s been the main focus of today,” a trader said. “It felt like a lot of people were sitting on their hands waiting for this.”

Last week, the company announced that it had reached an agreement with creditors to ease the covenant on its bonds in order to avoid a breach.

Luxembourg-based sector peer Intelsat’s issues were mixed.

Intelsat Jackson Holdings SA’s 5½% notes due 2023 added ½ point to close at 90½ bid. Intelsat (Luxembourg) SA’s fell ¾ point to close at 76¼ bid.

Earlier in the week, the notes were pushing lower after a series of news stories concerning the U.S. government’s changing attitudes toward C-band spectrum usage marred the name.

Uniti, Windstream declines

Meanwhile, Uniti’s paper declined, market sources said.

The 8¼% paper due 2023 shed 1¼ points to close at 86½ bid.

The Little Rock, Ark.-based real estate investment trust received a downgrade from Fitch on Thursday.

Fitch lowered its issuer default rating, citing the company’s auditor’s statement that the bankruptcy filing of major customer Windstream could lead to going concern issues for Uniti.

Little Rock, Ark.-based rural communications name Windstream’s notes also ended the session negative.

The 9% notes due 2025 shaved off 4 points to close at 64½ bid. The 10½ notes due 2024 also lost 4 points to close at 68¼ bid.

The company filed for Chapter 11 bankruptcy in February after a court ruled that it defaulted on its bonds in 2015 after spinning off Uniti.

Oil tranches mixed

Despite a positive session for oil futures, top distressed oil tranches were mixed, traders said.

Los Angeles-based independent oil and gas producer California Resources’ issues were under pressure.

The 6% notes due 2024 dropped 1½ points to close at 69 bid. The 8% notes due 2022 fell by ¾ point to close at 74¼ bid.

London-based contract driller Ensco’s paper ended mixed.

The 7¾% paper due 2026 rose 3¼ points to close at 85 bid. The 7.2% paper due 2027 lost 3¼ points to close at 79½ bid.

On Thursday, West Texas Intermediate crude oil futures for April delivery added 44 cents to close at $56.66 per barrel.

North Sea Brent crude oil futures ended the session at $66.30 per barrel after gaining 31 cents.

Neiman falls, Revlon mixed

Elsewhere, in the retail sector, Neiman Marcus’ notes fell, market sources said.

The 8% notes due 2021 lost ¼ point to close at 56½ bid.

The Dallas-based luxury retailer has remained in focus since it announced an “amend-and-extend” transaction with a majority of its creditors last week.

The agreement allows for three-year maturity extensions on its credit facilities and unsecured notes and an exchange of $250 million in unsecured notes for $250 million of 10% cumulative MyTheresa preferred equity.

“That’s something that names like PetSmart could draw from as it tries to get their creditors back in good graces,” a trader said.

New York City-based cosmetics producer Revlon’s issues were mixed.

The 5¾% notes due 2021 dropped ¾ point to close at 82¾ bid. The 6¼% notes due 2024 gained ¼ point to close at 51¾ bid.

A recent report from Nielson showed that the company’s sales fell 15% in the four-week period prior to Feb. 23.

Dean Foods slides

Dean Foods’ paper continued its downward trend, traders said.

The 6½% paper due 2023 shaved off ¼ point to close at 67¼ bid.

On Wednesday, the 6½% paper dropped 1½ points.

The Dallas-based dairy product manufacturer’s paper has been consistently falling after a recent announcement that it would conduct a strategic alternatives review as it combats falling sales.

On Wednesday, S&P Global Ratings downgraded the company’s issuer credit rating and senior unsecured debt rating.

© 2015 Prospect News.
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