SandRidge bonds drift lower; iHeartMedia loses ground; GenOn Energy debt rises; Intelsat declines

By Stephanie N. Rotondo

Seattle, May 17 – Distressed debt investors continued to focus on names that had news out on Monday, including SandRidge Energy Inc. and iHeartMedia Inc.

For its part, SandRidge said Monday that it had filed for bankruptcy, as weak oil prices pressured its balance sheet. Initially, the news gave the Oklahoma City-based company’s debt a pop, but the bonds were in retreat come Tuesday.

It was also reported Monday that iHeart had brought on more advisers to help the San Antonio-based multimedia company deal with its $21 billion debt load. Talk of a potential debt repurchase gave its debt a boost, but like SandRidge, it was coming in on Tuesday.

As for Tuesday’s headlines, GenOn Energy Inc. said it had inked a deal to sell certain assets in an all-cash deal. That name was also busy during the session, as its bonds pushed higher.

SandRidge retreats

SandRidge Energy bonds gave up some of the gains incurred Monday after the company announced it was seeking Chapter 11 protections.

“They were pretty active again,” a trader said of the bonds, seeing the 8¾% notes due 2020 retreating a point to 41¼.

The 7½% notes due 2023 were also weaker, though slightly, at 5 5/8.

Another market source pegged the 7½% notes due 2021 at 6 bid, off a point.

A third source said the name was “active again in the second-liens,” though he placed the price in the same 41½ to 42 range.

With $4.1 billion in debt, SandRidge said it filed for bankruptcy in order to implement a prepackaged reorganization plan that over two-thirds of creditors have agreed to.

iHeart gives up gains

iHeartMedia debt was also coming in on Tuesday, though it had improved on Monday on reports the company had brought on restructuring adviser Millstein & Co.

A trader said the 14% notes due 2021 drifted off nearly 2 points to 35½.

Reuters, which first reported the additional adviser, reported in March that the company had signed on investment bank Moelis & Co. as a financial adviser.

The hiring of the additional adviser comes as iHeart and its senior creditors battle in court over the company’s transfer of assets to a new unit, Broader Media LLC. For their part, creditors are claiming that the move constituted a default.

On Monday, iHeart said it was in talks with certain creditors to amend a credit agreement, as well as its priority guaranteed notes.

“Although the current litigation may be resolved without a bankruptcy filing, a conversion of the several billion junior debt to equity to reform the capital structure may be difficult without a prearranged or prepackaged filing,” wrote Gimme Credit LLC analyst Kim Noland in an afternoon comment published Tuesday.

GenOn up on asset sale

GenOn Energy bonds were “all up,” a trader said, after the company announced it had inked a deal to sell its Aurora Generating Station for $365 million in cash.

A trader saw the 9½% notes due 2018 rising a point to 84½, as the 8½% notes due 2021 added 3 points to close at 75.

The 7 7/8% notes due 2017 gained almost 3 points, to end at 89.

Back in March, Moody’s Investors Service downgraded the company to Caa2 from B3, giving it a negative outlook. The rating agency said the change was due to an “untenable capital structure,” as well as an expected “extended period of cash flow deficit.”

Intelsat weakens

Intelsat SA “was a little weaker in the luxco paper,” a trader said Tuesday.

“The downward price action is probably attributable to the default notice that a hedge fund sent them regarding a dividend that was paid to the parent that they claim shouldn’t have been allowed,” the trader said.

He said the 6¾% notes due 2018 “traded down a little over a point” to 72, while the 7¾% notes due 2021 “traded around 30.”

Last week, Intelsat announced that it would pay up to $625 million in cash to redeem $3.97 billion of notes issued by its Intelsat Jackson Holdings SA unit.

Under the terms of the tender, Intelsat Jackson unit will exchange up to $815.25 million of the 6 5/8% notes for $740 per each $1,000 of notes; up to $2 billion of the 5½% notes at $730 per each $1,000; and up to $1.15 billion of the 7½% notes due 2021 for $775 per each $1,000.

There is a $20 early tender premium for each $1,000 tendered by 5 p.m. ET on May 25.

The tender will expire at 11:59 p.m. ET on June 9.

News of the tender came after the Jackson unit said in a regulatory filing that it had repurchased approximately $460 million of its 6 5/8% notes since April 28. The notes were acquired via the open market as well as from privately negotiated purchases, all at a discount to par.

Intelsat is a Luxembourg-based commercial satellite services provider.

© 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.