Intelsat notes gain again as company offers new notes; Diebold plummets after reporting Q2 loss

By James McCandless

San Antonio, Aug. 1 – The distressed debt market saw increased trading on Wednesday as earnings season ramped up.

Intelsat SA notes gained again as the company prepares a $1 billion offering of new notes. On Tuesday, the company released a mixed earnings report.

Diebold Nixdorf, Inc. issues cratered after the company posted an unexpected loss in its Q2 earnings report.

Community Health Systems, Inc. paper declined after the company announced that an affiliate of has completed an asset sale.

Frontier Communications Corp. notes were mixed again. The company released its Q2 earnings report after market close last Thursday.

FirstEnergy Solutions Corp. issues rose again. On Tuesday, its parent company posted its Q2 earnings report.

American Tire Distributors fell again as the company implements a reorganization strategy.

Intelsat up

Luxembourg-based satellite communications company Intelsat notes improved again, traders confirmed, as subsidiary Intelsat Connect Finance SA prepares to make a $1 billion offering of senior notes due 2023 on Thursday.

On Tuesday, the company posted its Q2 earnings report, showing a 38 cents per share loss versus analyst estimates of a 37 cents per share loss. It also reported higher than expected revenues of $537.71 million.

“The whole structure was positive,” a trader said. “There were a lot of moving parts driving their notes up.”

The Intelsat (Luxembourg) SA 7¾% notes due 2021 rose ¾ point to close at 96¼ bid. The 8 1/8% notes due 2023 added 2 points to close at 87½ bid.

On Tuesday, the 7¾% notes picked up ¼ point and the 8 1/8% gained ½ point.

Diebold dips

North Canton, Ohio-based connected commerce solutions company Diebold’s issues tumbled, market sources confirmed, after the company posted a dismal Q2 earnings report. Analysts had expected a 1 cent per share loss versus the reported 21 cents per share loss. Revenues fell to $1.11 billion. The company is currently in talks with its lenders about amending its credit agreement.

“This was one of the more topical names today,” a trader said.

The 8.5% notes due 2024 plummeted about 13¾ points to close at around 80¾ bid.

Community Health off

Franklin, Tenn.-based hospital operator Community Health Systems’ paper declined, traders confirmed, after an affiliate of the company completed the sale of a Florida hospital to Florida Hospital Ocala, Inc., a subsidiary of Adventist Health System Sunbelt Healthcare Corp. The sale is part of a debt reduction strategy.

On Monday, the company released its Q2 earnings report, surpassing analyst expectations with a 1 cent loss per share and $3.56 billion in net operating revenues.

The 7 1/8% paper due 2020 lost about ¾ point to close at 87¾ bid. The 6 7/8% paper due 2022 fell ¾ point to close at 48 bid.

On Tuesday, the 7 1/8% paper lost about ½ point and the 6 7/8% paper traded down about ¼ point.

Volume names trade

Norwalk, Conn.-based wireline communications name Frontier Communications issues continued to trade mixed. The company released its Q2 earnings report on Tuesday, missing analyst estimates of a 72 cents per share loss with an 80 cents per share loss. It also reported a net loss of $18 million.

The 7 5/8% notes due 2024 gained about ¾ point to close at around 68½ bid. The 10½% notes due 2022 shaved off ¼ point to close at 90½ bid. The 11% notes due 2025 fell about ¾ point to close at around 80¼ bid.

On Tuesday, the 7 5/8% notes picked up about ¼ point, the 10½% notes were level and the 11% notes rose about ¼ point.

FirstEnergy Solutions, a subsidiary of Akron, Ohio-based electricity producer FirstEnergy Corp., saw its notes gain again. In its Q1 report, the company missed analyst expectations of earnings at 53 cents per share with 28 cents per share with revenue at $2.7 billion.

The 6.05% paper due 2021 rose about 1½ point to close at around 60½ bid. The 6.8% bonds due 2039 added about ½ point to close at 59½ bid. The 6.85% bonds due 2034 picked up 2¼ points to close at 61¼ bid.

On Tuesday, the 6.05% paper rose about 2½ points, the 6.8% bonds gained about 1 point and the 6.85% bonds traded up 3¾ points.

Huntersville, N.C.-based tire distributor American Tire paper fell again. The company is in talks with bondholders as it tries to sustain itself after losing distribution deals with Bridgestone and Goodyear.

The 10¼% paper due 2022 lost 1 point to close at 40 bid.

On Tuesday, the 10¼ paper lost ¾ point.

“Today felt a little busier,” a trader said. “With more earnings coming, volume should keep rising.”

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