Intelsat softens as high-yield issue priced; Whiting falls from Friday high; EP rises on asset sale

By Stephanie N. Rotondo

Seattle, March 21 – Recently topical names in the distressed debt space – such as Intelsat SA and Whiting Petroleum Corp. – continued to hold sway in the marketplace on Monday.

Intelsat bonds were trending down as the company looked to tap the high-yield market with a $1.25 billion senior secured debt issue due in 2024. Proceeds from the offering – being done via subsidiary Intelsat Jackson Holdings SA – are expected to be used to pay down debt.

Meanwhile, investors continued to react to news of a private debt exchange at Whiting Petroleum. The oil and gas producer announced the swap on Friday, which pushed the debt up as much as 10 points.

Come Monday, however, the notes were giving back some of those gains.

Also in the oil and gas arena, EP Energy Corp. paper popped on news the company had sold some of its shale assets, to the tune of $420 million in cash.

But while topical or news-driven names were moving a fair bit, traders lamented that the week was off to a slow start.

“It was a pretty miserably slow day,” one trader said.

The lack of volume was attributed to it being a short holiday week. The markets will be closed Friday in observance of Good Friday.

Intelsat down on new issue

Intelsat paper was losing ground Monday as a subsidiary priced a $1.25 billion offering of 8% senior secured notes due 2024.

A trader saw the 6 5/8% notes due 2022 falling a deuce to 56, while the 5½% notes due 2023 weakened a point to 62.

However, he said the 8 1/8% notes due 2023 improved over 2 points to 29.

The new issue – being sold as a Rule 144A offering – was upsized from $1 billion. Price talk was in an 8 to 8¼% range.

Last week, it was reported that the company was in talks with bondholders on a potential debt swap. The effort came as talks to secure an amendment on the company’s credit facilities broke down.

Intelsat is a Luxembourg-based satellite services provider.

Whiting comes off highs

Whiting Petroleum’s bonds – and equity – gave up some of the gains incurred on Friday when the company announced a privately-negotiated debt swap.

A trader said the 5% notes due 2019 dipped almost a point to 75¼, as the 5¾% notes due 2021 declined nearly 2 points to 73.

The company’s convertible debt was also waning.

One trader saw the 1.25% convertible notes due 2020 61.75 bid, 62.25 offered.

That compared to levels closer to 63 on Friday.

Another source placed the issue around 81.875, a loss of about a point.

On Friday, the Denver-based oil and gas company said it had privately exchanged about $430 million of unsecured notes for convertible debt. The swap included $48.7 million of 6½% notes due 2018; $61.8 million of 5% notes due 2019; $152.5 million of 5¼% notes due 2021, and $166.7 million of 6¼% convertibles due 2023.

For their holdings, bondholders received convertible notes with the same coupon and maturity as the issues they held.

The new convertibles were already trading come Monday.

A source placed the 6.25% convertible notes due 2023 at 84.374, off 1½ points. The 5.25% convertible notes of 2021 meantime rose over a point to 81.375.

The 5% convertible notes due 2019 closed at 84.75, a loss of nearly 2 points.

The stock underlying the convertibles ended the day off 28 cents, or 3.36%, at $8.06.

EP notes get a lift

Late Friday, EP Energy announced that it had entered into an agreement to sell nearly all of its Haynesville and Bossier shale assets to Covey Park Gas LLP.

Come Monday, the company’s debt was getting a sizeable boost.

A trader said the 9 3/8% notes due 2020 jumped 10 points to 55¼.

Covey will pay $420 million in cash for the assets, EP said in a regulatory filing.

The Houston-based oil and gas company expects the deal to close in the second quarter of 2016.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.