Community Health mixed again after ratings downgrade; Frontier Communications mixed on CFO departure

By James McCandless

San Antonio, June 21 – Traders reported another steady day of activity in the distressed debt market on Thursday as volume favorites continued to move.

Community Health Systems, Inc. notes were mixed again after receiving a ratings downgrade. On Wednesday, the company announced the results of three exchange offers.

Frontier Communications Corp. issues were mixed as the company announced the resignation of its chief financial officer.

Windstream Holdings, Inc. paper was mixed for a fourth day. On Monday, the company commenced an exchange offer.

Intelsat SA notes were mixed. Last week, the company announced a buyback program for its 7¾% notes due 2021. PHI, Inc. issues declined. The company recently announced a cash tender offer for its outstanding 5¼% senior notes due 2019. Mallinckrodt plc paper fell.

Community Health downgraded

Franklin, Tenn.-based hospital operator Community Health Systems issues were mixed again, traders confirmed, after Standard & Poor’s lowered the company’s its corporate credit rating and affirmed a negative outlook (see related story elsewhere in this issue).

On Wednesday, it announced the final results of the exchange offers for three series of notes by its subsidiary CHS/Community Health Systems, Inc.

The 7 1/8% notes due 2020 were level at 86 bid. The 6 7/8% notes due 2022 gained ¾ point to close at 55¼ bid.

On Wednesday, the 7 1/8% notes rose about ¾ point and the 6 7/8% notes lost about 1 point.

Frontier mixed

Norwalk, Conn.-based wireline name Frontier Communications issues were mixed, market sources confirmed, after the company announced the resignation of chief financial officer R. Perley McBride, who will depart from the company on Aug. 31. President and chief executive officer Daniel McCarthy praised McBride for his instrumental work in managing the company’s debt.

“He has negotiated improvements in the terms of our credit agreements, raised $1.6 billion of new second lien debt and retired approximately $1.7 billion of unsecured notes,” McCarthy said. “These steps, together with the stabilization in our business as reflected in our most recent quarterly results, have placed Frontier on a positive path forward.”

Recently, the company failed to garner a satisfactory bid in an auction for its Florida assets.

The 7 5/8% notes due 2024 fell about ¼ point to close at around 72¾ bid. The 10½% notes due 2022 lost about 3¼ points to close at 92½ bid. The 11% notes due 2025 gained about ¼ point to close at around 84 bid.

On Wednesday, the 7 5/8% notes gained about ½ point, the 10½% notes rose about 3¼ points and the 11% notes rose about ¼ point.

Windstream mixed

Little Rock, Ark.-based network communications solutions name Windstream paper was mixed, traders confirmed. On Wednesday, Standard & Poor’s downgraded subsidiary Windstream Services LLC’s corporate family rating and probability of default rating.

Earlier this week, the company announced an offering of new second-lien notes in exchange for multiple series of its existing senior notes.

The 7¾% paper due 2021 added 1 point to close at around 82¼ bid. The 7¾% paper due 2020 shaved off about ½ point to close at around 91½ bid.

On Wednesday, the 7¾% paper due 2021 was level and the 7¾% paper due 2020 lost about ¼ point.

Volume names trade

Luxembourg-based satellite communications company Intelsat notes were mixed. Last week, the company announced that it would buy back its Intelsat (Luxembourg) SA 7¾% senior notes due 2021.

The 7¾% notes due 2021 jumped up 1¾ points to close at 94½ bid. The 8 1/8% notes due 2023 lost about ¼ point to close at 81½ bid.

Lafayette, La.-based offshore energy transportation name PHI’s issues fell. Last Friday, the company announced of a cash tender offer to purchase any and all of its $500 million in outstanding 5¼% senior notes due 2019.

The 5¼% notes due 2019 fell 1½ points to close at 97½ bid.

Britain-based drug maker Mallinckrodt saw its 4¾% paper due 2023 drop about ¼ point to close at around 84¼ bid.

“It was a pretty steady day, as far as the go-go names were concerned,” a trader said. “But the activity didn’t really stretch out past that.”

© 2015 Prospect News.
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