AK Steel bonds end mixed; Intelsat ‘active’ on possible asset sale news; iHeart Media bounces

By Stephanie N. Rotondo

Phoenix, Sept. 23 – The distressed debt arena remained weak Wednesday, though there were a few names that managed to trend higher.

“Some stuff that got whacked yesterday [amid a broader market sell-off] came back” in midweek trading, according to one trader.

The trader also noted that volume was lower given that “a good part of our trading brethren were out” for the Yom Kippur holiday.

In the world of commodities, AK Steel Holdings Corp. paper traded all over the place following the previous day’s declines. The bonds came under pressure on Tuesday as steel prices dropped on new data that showed output was slowing.

Intelsat SA bonds were meantime coming in after it was reported that the company had hired advisors to explore potential asset sales.

As for the some of the day’s gainers, iHeart Media Inc. was one that “bounced,” according to a trader. However, there was no news to spark the rebound.

AK Steel mixed

Traders gave mixed reviews of AK Steel debt on Wednesday, following a decline on Tuesday that was spurred by a drop in commodity prices.

One trader said the 7 5/8% notes due 2021 finished up over a point at 75¼. However, a second market source pegged the 7 5/8% notes due 2020 at 55½, a loss of 3 points on the day.

At another desk, the 2021 paper was called “about where it was,” trading in a 54 to 55 range.

On Tuesday, the World Steel Association put out a report that showed global steel output had declined 3% in August, the fourth consecutive months of declines. Among domestic producers, output was off 10%, due in part to cheaper imports flooding the market.

Intelsat exploring sales

Intelsat has reportedly hired Goldman Sachs & Co. to look into potential asset sales, according to various news reports.

A trader said the name was “a little more active” on the news, seeing the 7¾% notes due 2021 trading in a 69 to 70 context.

“It looked like they kind of popped initially on the news and then kind of drifted back in some,” the trader said.

Another market source placed the 6 5/8% notes due 2022 at 84½, which was deemed 1½ points higher.

Intelsat is the world’s largest commercial satellite operator in terms of revenue – estimated at about $2.4 billion – but is laboring under a mountain of debt – about $14 billion. The potential asset sales are one way is the company is reportedly considering hacking away at that debt load.

iHeart rallies

iHeart Media – a high-beta name that tends to fluctuate with the broader market trends – was moving back up.

One trader saw the 14% notes due 2021 rising over 3 points to 44¾. The 10% notes due 2018 were meantime almost a point better at 60¾.

Another trader saw the 14% notes ending at 45, up from the lower-40s on Tuesday. The 10% notes closed “around 60,” which compared to previous levels in the high-50s.

There was no fresh news out on the San Antonio-based multimedia company to act as a catalyst.

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