iHeart, Intelsat bonds trade active as earnings eyed; crude’s weakness continues to pressure energy debt

By Stephanie N. Rotondo

Seattle, July 26 – Upcoming earnings, as well as continuing declines in oil prices, were driving the distressed debt market on Tuesday.

A trader said there was “a lot of” iHeart Communications Inc. activity during the session, though he was not sure what was driving it.

The name was also on the busier side in the previous session. The San Antonio-based multimedia company is slated to release its latest quarterly results next week.

In Tuesday trading, however, the 12% notes due 2021 were seen jumping 5 points to close at 44. The 10% notes due 2018 were steady at 57½.

In the 9% notes due 2022, those were half a point better at 75, a trader said. The 10 5/8% notes due 2023 were nearly 2 points higher at 76¾.

Intelsat SA was another one that traded more actively than not. The Luxembourg-based commercial satellite services provider is announcing its earnings on Wednesday.

Ahead of the release, a trader said the 7% notes due 2019 were unchanged at 77½, though the 7¼% notes due 2020 slipped a quarter-point to 69¼.

Analysts are forecasting earnings per share of 30 cents on revenue of $533.51 million.

Energy sector loses power

In the oil and gas arena, bonds were trending lower along with domestic crude oil prices.

West Texas Intermediate crude fell 1.14% for the day, closing at $42.64 a barrel. The commodity has been on a losing streak on concerns about rising supply and waning demand. Those fears were only furthered on Tuesday as BP plc – the first major oil company to report second-quarter results – posted a lower-than-expected profit and said its refining margins were the weakest they have been in six years.

As for distressed dealings, Chesapeake Energy Corp.’s 8% second-lien notes due 2022 were deemed off by over a point at 87. At another shop, the 6 5/8% notes due 2020 were seen a point weaker at 72½ bid.

Whiting Petroleum Corp.’s 5¾% notes due 2021 also continued to slide, falling 1½ points to 86½.

In California Resources Corp., the 8% second-lien notes due 2022 declined nearly 2 points to 65, according to a trader.

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