Distressed debt finishes week ‘sideways’; Intelsat stays busy as tender results revealed; energy quiet

By Stephanie N. Rotondo

Seattle, July 15 – After running up for most of the week, the distressed debt market ended Friday “kind of sideways,” a trader said.

The trader noted the “huge inflow into high yield” over the course of the week, which he said “explains the strength and the one-way flow.”

The trader also remarked that overall, investors were more interested in new issues than in distressed names.

Intelsat SA’s Intelsat Jackson Holdings SA unit bonds “remain pretty active,” a trader reported. The 8% notes due 2024 – a $1.25 billion issue priced March 21 – have been particularly busy of late, he said, and that continued into Friday trading.

However, he said the paper was unchanged in a 90½ to 91 context.

As for the 7¼% notes due 2019, those were about half a point weaker at 69½, he said.

The Luxembourg-based commercial satellite services provider said on Friday that it was buying back $673.45 million of the 6 5/8% notes due 2022 via its oversubscribed tender.

The tender – first announced in May – was originally for up to $625 million of three series of Jackson-linked notes, though that was later reduced to $463 million. The offer was extended – and pricing reduced – a couple of times before it finally expired on Thursday.

Nearly $758 million of the $815.25 million of 6 5/8% notes were tendered by the end of the deal. Not all notes were accepted, however, nor were any of the 5½% notes due 2023 or 7½% notes due 2021.

Away from Intelsat, there wasn’t much notable among distressed dealings, a trader said.

Even the energy sector, which usually always sees a decent level of activity, was on the quiet side.

A trader said both California Resources Corp. and Chesapeake Energy Corp. – typical “go-to” names – were “pretty quiet.”

He said California Resources’ debt was about unchanged on the day. Chesapeake’s 8% second-lien notes due 2022 were likewise steady, trading around 90, he said.

For its part, domestic crude oil posted only modest gains for the day, though it did end stronger for the second week in a row. The commodity’s tepid price move came as Baker Hughes reported that U.S. drillers added more active rigs for the sixth week in a row. There was also fresh data from the U.S. and China that suggested demand for oil would increase.

© 2015 Prospect News.
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