Intelsat issues lose altitude in active dealings; Cal Res, energy drillers up as crude prices surge

By Paul Deckelman

New York, Jan. 9 – Activity in distressed debt and the bonds and notes of otherwise underperforming companies picked up on Tuesday, traders said, in line with a generally busier atmosphere in the overall high-yield bond market spurred by the presence of several new deals.

Traders saw the various bonds in communications satellite company Intelsat SA’s capital structure lower, although they saw no news that might explain the move.

Most of the activity involved the somewhat better-rated paper of the company’s Intelsat Jackson Holdings SA division.

But one of the big losers on the day was the 2021 notes from Intelsat (Luxembourg) SA unit.

Elsewhere, energy names such as California Resources Corp. and driller Noble Holding International Ltd. gained in line with sharply higher oil prices.

So did other driller credits such as Ensco plc and Transocean Ltd.

Intelsat bonds trade lower

Traders saw Luxembourg-based communications satellite provider Intelsat’s bonds losing altitude Tuesday, although one trader said that he was “not sure what was driving that – but the bonds were busy and definitely off.”

The company’s Intelsat Jackson Holdings SA 5½% notes due 2023 closed down 3/8 point at 81 1/8 bid, with more than $23 million having traded.

The Jackson unit’s 9¾% notes due 2025 retreated by 7/8 point, to 95 7/8 bid, with over $21 million of volume.

And its 7¼% notes due 2020 likewise eased a little to end at 93 bid, with over $19 million traded.

But the company’s Intelsat (Luxembourg) SA 7¾% notes due 2021 – weaker-rated, at Ca/CCC-, versus the Jacksons’ Caa2/CCC+– were the big losers on the day, a trader said, seeing those bonds plummet 4 ½ points on the session to end at 48¾ bid, on volume of over $11 million.

Crude boosts energy names

In a familiar scenario, energy-rated names pushed higher Tuesday in line with a surge in world crude oil prices.

Key domestic grade West Texas Intermediate for February delivery soared by $1.23 per barrel in Tuesday’s New York Mercantile Exchange action, settling at $62.96, after having pushed above $63 during the session.

March-contract North Sea Brent crude was up by $1.04 per barrel in London futures trading, ending at $68.82.

It was the second straight gain and the fourth in the last five sessions, for both crude oil grades.

Los Angeles-based oil and natural gas exploration and production operator California Resources’ 8% notes due 2022 gained ¾ point on the day, ending at 87¼ bid, although one trader opined that “not that many traded” – volume was only around $14 million, relatively small for the $2.25 billion sector benchmark deal.

Some of the energy-drilling names that work with the E&P operators like CalRes pushed upward.

Cayman Island-based driller Noble Holding’s 6.050% long bonds due 2041 were up by a deuce on the day, ending at 70¼ bid, with over $31 million having traded.

Its 7¾% notes due 2024 gained 1 7/16 points ending at 93 3/16, while its 7.70% notes due 2025 were up 2¼ points, at 89½ bid.

London-based drilling company Ensco plc’s 4½% notes due 2024 gained 1 3/8 point to end at 89½ bid, with over $18 million traded.

Swiss-based Transocean’s 7½% notes due 2025 were up by 3/16 point, at 105 7/16 bid, with over $15 million traded.

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