Intelsat Jackson higher on offering of $1.5 billion eight-year notes; Valeant up after Paulson brought on

By Colin Hanner

Chicago, June 19 – Though news was lighter as compared to a flurry of reports for distressed companies on Friday, activity continued to center around those names on Monday in the distressed debt market, a market source said, with Intelsat SA leading the space in activity.

The satellite telecommunications company announced it priced $1.5 billion of eight-year 9¾% senior notes to fund the redemption of Intelsat Jackson Holdings SA 7¼% notes due 2019, which was announced Monday.

Intelsat Jackson notes were higher on the day, while Intelsat Luxembourg Holdings SA were lower.

Valeant Pharmaceuticals International, Inc. was higher in two of its issues after the company announced John Paulson joined its board of directors.

Offshore supply vessel operator Hornbeck Offshore Services, Inc. saw a slight correction in its bonds a session after a several-point surge. The company announced a revised credit facility on Friday, prompting its stock and bonds to gain.

Retail grocers, which, on Friday, reacted wildly to Amazon Inc.’s acquisition of Whole Foods Inc., were much quieter on the session, as were distressed exploration and production companies, which were mixed following a 1% plunge in the oil commodity market.

J. Crew Group Inc. bonds were again higher following reaching the threshold on Friday for its term loan amendment.

Intelsat mixed following offering

On Friday, Intelsat announced it would redeem the outstanding Intelsat Jackson Holdings SA 7¼% notes due 2019, which were up ½ point to par, a market source said.

The redemption price will be par plus accrued interest up to but excluding the redemption date.

In order to pay for the redemption, Intelsat announced Monday that it was offering of $1.5 billion eight-year senior notes, which caused an uptick in similarly-held issues, a market source said. Pricing of the notes was announced Monday evening.

The Jackson-held 7¾% notes were up 1 point to 96, while the 7% notes due 2021 were up 2 points to 94¼.

Rounding out the Jackson paper were the 5½% notes due 2023, which saw a ¾-point uptick to 83¾.

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

And the 7¾% notes due 2021 were down 2 points to 55¾.

Also on Friday, the company announced a slight guidance decrease due to a longer sales process with one of its services, the aftershocks of which have yet to settle.

Valeant higher with Paulson arrival

Bonds for the Laval, Quebec-based Valeant Pharmaceuticals rose after the company announced that John Paulson, of investment management firm, Paulson and Co. – which is also Valeant’s biggest shareholder – would be joining its board of directors as a director, a market source said.

Its 5 7/8% notes due 2023 were up 1 point to 84, and its 6 1/8% notes due 2025 mirrored the 1-point gain, finishing at 83.

“The strategic plan to transform Valeant smartly focuses on rebuilding the company's core franchises in ophthalmology, dermatology and gastroenterology while simultaneously using the proceeds from the sale of non-core assets and operating cash flow to de-lever the company,” Paulson said in a news release.

Valeant’s stock was up 81 cents, or 6.4%, to $13.47.

Hornbeck corrects, oil mixes

Though volume was substantially lower on Monday, Hornbeck Offshore saw a correction in two of its issues following a splurge during Friday’s sessions.

Its 5% notes due 2021 were down 2 points to 55, a market source said, while the 5 7/8% notes due 2020 were down 1½ points to 59. Those bonds were up 7 and 6½ points, respectively, on Friday.

On Friday, Hornbeck announced that its $200 million senior secured revolving credit facility would be replaced with a first-lien delayed-draw credit facility providing up to $300 million of term loans, the company said in a news release.

Elsewhere in the E&P sector, West Texas Intermediate was lower again to just above $44 a barrel, though bonds were mixed.

California Resources Corp.’s 8% notes due 2022 were up ¾ point to 66¾, a market source said.

The same day as S&P Global Ratings lowered the company’s credit rating to B- from B, EP Energy Corp.’s 8% notes due 2025 were unchanged at 75.

Noble Holdings International Ltd.’s 7¾% notes due 2024 were down 1/8 point to 83.

Grocers quiet

The weekend quieted the tremors of the mammoth acquisition of Whole Foods by Amazon, with grocers in the distressed arena trading down just fractionally on the session.

Fresh Market Inc.’s 9¾% notes due 2023 were down 1/8 point to 84 3/8.

And BI-LO LLC’s 9¼% notes due 2019 were down 3/8 point to 85¼.

J. Crew higher

Late Friday, J. Crew Group Inc. announced that it had received consents for its term loan amendment, which, in turn, stopped litigation between lenders and the company for its intellectual property transactions.

The property in question was placed into a holding company in December so as to not be held as leverage in future transactions.

J. Crew said that the move was “strategically important to its overall effort in positioning the company for long-term success.”

On the day, its 7¼% notes due 2019 were up 1¼ points to 65.

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