Hornbeck notes active amid talk of club deal; Digicel improves on earnings release

By James McCandless

San Antonio, Nov. 28 – The distressed space saw activity congruent with equity markets, largely improving on Wednesday.

Hornbeck Offshore Services Inc.’s notes were mixed amid talk of the company reaching a club deal to handle its debt.

In telecom, Digicel Group Ltd.’s issues gained as the company seeks to reassure investors with its earnings report amid talks with noteholders on an exchange offer.

Sector peer Altice SA’s paper saw a boost.

Elsewhere in the energy space, Alta Mesa Resources, Inc.’s issues rebounded after disappointing the market with its third-quarter earnings earlier in the month.

Bristow Group Inc. and Sanchez Energy Corp.’s paper fell while California Resources Corp.’s notes were mixed.

Metals producer Ferroglobe plc’s notes saw a recovery on mixed market sentiment over a recent earnings report.

AK Steel Holding Corp.’s issues also gained.

Hornbeck mixed

Hornbeck’s notes were mixed Wednesday, traders said.

The 5 7/8% notes due 2020 lost ¾ point to close at 65¼ bid. The 5% notes due 2022 picked up ¼ point to close at 62½ bid.

The company is currently trying to secure a club deal in order to get rid of a large portion of its debt, a trader said.

“They are taking a positive step to remove the first liens,” a trader said. “It’s a good deal if they can get it done. Everything we’ve heard suggests that it’s not a guarantee.”

The Covington, La-based marine energy transportation name’s notes have been under pressure since the company reported an earnings loss for the third quarter in October.

Digicel rises

Elsewhere, Digicel’s issues saw a boost, market sources said.

The 8¼% notes due 2020 added 1½ points to close at 67 bid, erasing yesterday’s losses.

On Tuesday, the 8¼% notes lost 1½ points.

In response to inquiries, the Kingston, Jamaica-based mobile phone network provider told its noteholders that it had rising earnings in the three-month period ending in September.

The company reported EBITDA of $261 million and a 1% rise in subscribers.

On Tuesday, it announced that it would extend its exchange offers for any and all of its outstanding $2 billion 8¼% notes and any and all of its outstanding $1 billion 7 1/8% notes to Dec. 7.

During ongoing talks with creditors, the deadline for the exchange offers has been extended several times.

Altice moves up

Sector peer Altice’s paper saw a boost.

The 7 5/8% paper due 2025 rose 2 points to close at 79¼ bid.

“That’s been a consistent favorite this week in terms of volume,” a trader said of the Amsterdam-based telecom name.

The company’s paper has been on a downward trend on a largely disappointing third-quarter earnings report.

Alta Mesa up

Alta Mesa’s notes were seen rising, traders said.

The 7 7/8% notes due 2024 rose 2 points to close at 71½ bid.

On Tuesday, the 7 7/8% notes fell 2½ points.

The Houston-based midstream energy services company has been a market target after showing a net income of $7.1 million and an EBITDA of $10.9 million in its third-quarter earnings report released on Nov. 13.

Oil and gas mixed

Elsewhere in the energy sector, another mixed day in trading for oil futures saw similar moves in popular names.

Houston-based offshore transportation name Bristow Group’s 6¼% notes due 2022 fell 2 points to close at 53 bid.

Sanchez Energy, a Houston-based independent oil and gas producer, saw its 6 1/8% paper due 2023 drop 2 points to close at 30 bid.

Los Angeles-based peer California Resources’ 6% notes due 2024 traded up ½ point to close at 75½ bid. The 8% notes due 2022 lost 1½ points to close at 78 bid.

West Texas Intermediate crude oil futures ended the session up 39 cents at $50.68 per barrel. North Sea Brent crude oil lost $1.45 to settle at $58.76 per barrel.

Ferroglobe moves up

Ferroglobe’s issues recovered some of Tuesday’s losses, market sources said.

The 9 3/8% notes due 2022 gained ¾ point to close at 89½ bid.

On Tuesday, the 9 3/8% notes fell 14 points.

The London-based specialty metals producer reported earnings of 0 cents per share where analysts expected a 15 cents per share profit on Tuesday.

Citing the rising cost of raw materials, the company said that it would lower production in its silicon-metal and manganese-based alloy businesses.

West Chester, Ohio-based sector peer AK Steel’s paper rose.

The 6 3/8% paper due 2025 added 1½ points to close at 82½ bid.

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