Ferrellgas notes slide after executive departures; Intelsat issues decline amid selloff

By James McCandless

San Antonio, Nov. 29 – Trading in the distressed market took a slightly negative turn during the Thursday session.

Ferrellgas Partners, LP’s notes declined Thursday in reaction to negative attention after the departures of its chief operating officer and its chief financial officer.

Meanwhile, Intelsat SA’s issues moved lower amid a common stock selloff and a reoffering.

Sector peer Frontier Communications Corp.’s paper was also negative.

In the oil space, Sable Permian Resources LLC’s notes rose.

McDermott International, Inc.’s issues jumped on a string of positive financial transactions.

Bristow Group Inc.’s and Weatherford International plc’s paper gained with oil futures while California Resources Corp.’s notes were mixed.

Chemical name Hexion Inc.’s issues continued a negative trend.

Ferrellgas meltdown

Ferrellgas’ notes were moving lower Thursday, traders said.

The 6½% notes due 2021 shed ¾ point to close at 84¾ bid. The 6¾% notes due 2022 lost 1¼ points to close at 82½ bid.

Last week, the Overland Park, Kan.-based propane company disclosed that chief operating officer Trenton Hampton and chief financial officer Doran Schwartz had voluntarily left their positions.

“It looks like a bit of a meltdown,” a trader said. “On top of that, they’re suspending cash distributions and recently cut their dividend.”

The notes have been under pressure throughout the year, most recently falling further after reporting a profit loss of 63 cents par share for the third quarter.

Intelsat, Frontier down

Intelsat’s issues saw a decline, market sources said.

Intelsat Jackson Holdings SA’s 5½% notes due 2023 lost 1 point to close at 89 bid. Intelsat (Luxembourg) SA’s 8 1/8% notes due 2023 fell 1¾ points to close at 83¼ bid.

“Intelsat was getting hammered today,” a trader said.

After market close Wednesday, the Luxembourg-based satellite operator announced a secondary offering of 10 million common shares by a group of shareholders.

“They’ve been built up a lot this year so it makes sense for some people to be getting out now,” the trader said.

Norwalk, Conn.-based domestic peer Frontier’s paper followed the negative trend.

The 7 5/8% paper due 2024 shaved off 1½ points to close at 57 bid. The 10½% paper due 2022 lost ¼ point to close at 80¼ bid. The 11% paper due 2025 traded down 1 point to close at 71 bid.

Oil names mostly rise

In the oil space, Sable Permian Resources’ notes were rising, traders said.

The 7 1/8% notes due 2020 added 1 point to close at 44½ bid.

The Houston-based independent oil and gas company’s notes became active recently after a disappointing third-quarter earnings report.

Meanwhile, McDermott’s issues saw a positive swing.

The 10 5/8% notes due 2024 rose 1¼ points to close at 86½ bid.

On Thursday, the Houston-based oil and gas equipment name announced the closure of a $300 million private placement of preferred stock and an increase in its letter-of-credit facility to $230 million.

“They’re making a few positive moves and it’s driving the bonds up,” a trader said.

The company’s issues entered distressed territory in early November after third-quarter results showed the company lagging in revenue and earnings estimates.

Elsewhere, Houston-based offshore aviation provider Bristow Group’s 6¼% paper due 2022 fell 1½ points to close at 51½ bid.

Baar, Switzerland-based oilfield services name Weatherford’s notes improved.

The 7¾% notes due 2021 picked up 1¾ points to close at 82¼ bid. The 8¼% notes due 2023 added 2 points to close at 66½ bid.

Los Angeles-based producer California Resources’ issues were mixed.

The 6% notes due 2024 fell ½ point to close at 75 bid. The 8% notes due 2022 picked up ¾ point to close at 78¾ bid.

At the close Thursday, West Texas Intermediate crude oil futures rose $1.16 to close at $51.45.

Hexion declines

Hexion’s paper extended a negative run, market sources said.

The 6 5/8% notes due 2020 lost 1 point to close at 83 bid. The 9% notes due 2020 fell 1¾ points to close at 47 bid.

“Those keep trading and keep getting pummeled,” a trader said.

The Columbus, Ohio-based chemicals producer’s paper has been consistently negative amid doubts that second-lien holders will recoup anything of value when more than $2 billion in debt matures in 2020.

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