Windstream notes mixed after asset sale; Weatherford issues decline as troubles mount

By James McCandless

San Antonio, Jan. 2 – A shortened week in the distressed space saw modest improvements in Wednesday trading.

Windstream Holdings Inc.’s notes were mixed in the wake of the sale of its consumer internet business.

Sector peers Intelsat SA and Frontier Communications Corp.’s issues were also seen improving.

In energy, Weatherford International plc’s paper declined despite gains in oil futures.

Gains for California Resources Corp.’s, Ensco plc’s, and Denbury Resources Inc.’s notes coincided with oil futures.

Retailer PetSmart, Inc.’s issues were rising as the company and its creditors move toward a resolution to a dispute over an equity transfer.

Meanwhile, Community Health Systems, Inc.’s paper was mixed to start the year.

Windstream mixed

Windstream’s notes were mixed Wednesday, traders said.

The 6 3/8% notes due 2023 fell ¾ point to close at 39 bid. The 7½% notes due 2022 picked up ¼ point to close at 49¾ bid.

On Monday, the Little Rock, Ark.-based network communications name announced the sale of its EarthLink consumer internet arm to Trive Capital for $330 million in cash.

The company originally purchased the segment for $1.1 billion in Feb. 2017.

“It doesn’t necessarily save them,” a trader said. “But it’s good news for them. They’ve needed a win for a while.”

Elsewhere in the telecom space, Luxembourg-based satellite operator Intelsat’s issues were improving.

Intelsat Jackson Holdings SA’s 5½% notes due 2023 gained ½ point to close at 88 bid. Intelsat (Luxembourg) SA’s 8 1/8% notes due 2023 rose ¼ point to close at 78¼ bid.

Norwalk, Conn.-based wireline communications company Frontier’s paper was also rising.

The 7 5/8% paper due 2024 added 2 points to close at 52½ bid. The 10½% paper due 2022 gained 1 point to close at 71 bid. The 11% paper due 2025 rose 2 points to close at 64 bid.

Weatherford drops

Meanwhile, in energy, Weatherford’s notes fell, market sources said.

The 8¼% notes due 2023 dropped ¼ point to close at 59¾ bid. The 9 7/8% notes due 2024 fell 1¼ points to close at 61½ bid.

Last week, the Baar, Switzerland-based oilfield services company announced an offer to exchange $600 million of 9 7/8% senior notes issued in a private placement for $600 million of the 9 7/8% senior notes.

The company is currently under pressure amid an ongoing debt issue and a delisting warning from the New York Stock Exchange.

Its common stock fell more than 28% on Wednesday.

“They’ve been getting beat up lately,” a trader said. “There was a brief recovery in what looked like a short squeeze, but that’s over now.”

Elsewhere in energy, rising oil futures gave way for improvements in distressed oil names.

Los Angeles-based independent oil and gas producer California Resources’ 8% notes due 2022 jumped 1½ points to close at 70½ bid.

London-based contract driller Ensco’s paper was also spotted rising.

The 7¾% paper due 2026 rose 2½ points to close at 74½ bid. The 5.2% paper due 2025 added ¾ point to close at 67¾ bid.

Houston-based producer Denbury’s notes were positive.

The 6 3/8% notes due 2021 picked up ½ point to close at 73 bid.

West Texas Intermediate crude oil futures for February delivery improved by $1.13 to close the Wednesday session at $46.54 per barrel.

North Sea Brent crude futures ended the day at $54.91 per barrel on a $1.11 increase.

“There’s a lot of talk on whether we’re staying under 50 for now or whether we’ll see a quick bounce,” a trader said. “For now, it looks like we’re stuck here for a short while. Maybe when trading gets under full swing next week it’ll climb back.”

PetSmart up

PetSmart’s issues were gaining, traders said.

The 8 7/8% notes due 2025 rose 1½ points to close at 60¼ bid. The 5 7/8% notes due 2025 added 1¼ points to close at 74 bid.

The Phoenix-based pet supplies retailer’s issues have been falling amid an ongoing dispute between it and its creditors over the private equity transfer of e-commerce arm Chewy.com.

This week, both sides made disclosure demands for internal documents relating to the transfer.

Creditors are seeking communications between the company and private equity owner BC Partners while PetSmart seeks internal communications between creditors concerning claims that the company was insolvent when the transfer was made.

Community Health mixed

Community Health’s paper was mixed, market sources said.

The 7 1/8% paper due 2020 shaved off 3½ points to close at 81 bid. The 6 7/8% paper due 2022 gained 2½ points to close at 48½ bid.

On Monday, the Franklin, Tenn.-based hospital operator announced the completion of its divestiture in two South Carolina hospitals, selling them to Spartanburg Regional Healthcare System effective Jan. 1.

The sale is a part of the company’s ongoing debt reduction plan enacted at the beginning of 2018.

© 2015 Prospect News.
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