Canacol Energy improves as market weighs cash, debt; iHeartCommunications trades lower

By Cristal Cody

Tupelo, Miss., May 13 – Canacol Energy Ltd.'s 5¾ senior notes due 2028 (Caa1/B-/CCC) hit a handle in the high 50s on Monday after rallying more than 13 points in the prior week as the company reported better-than-expected first-quarter results and faced a third ratings downgrade.

Canacol’s 5¾% senior notes due 2028 (Caa1/B-/CCC) rose around ¼ point to 58 bid, a market source said.

The distressed notes have made steady gains in the secondary market as chatter erupted over concerns Canacol Energy would miss a May debt payment.

Fitch Ratings announced on Friday that it lowered the ratings, following similar moves in April from Moody’s Ratings and S&P Global Ratings, on liquidity concerns, noting the company’s $14.4 million interest payment due May 24 and $35 million of cash tax payments due in the second quarter.

“Based on our financial model, we don’t think there’s any risk to the interest payments themselves,” a source said. “They would be able to fund the interest with the cash flow. The cash taxes, that’s more of a concern.”

In other distressed paper, iHeartCommunications, Inc.’s 8 3/8% senior notes due 2027 (Caa3/CCC-) fell about ¼ point to 35½ bid after the notes dove nearly 20 points in the prior week, a source said.

iHeartMedia’s stock also set a new 52-week low on Monday.

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