Intelsat notes fall on FCC chairman comments; Uniti issues gain after potential default waived

By James McCandless

San Antonio, March 21 – The distressed space continued to focus on energy on Thursday with a renewed eye on telecom names.

Intelsat SA’s notes fell after the chairman of the Federal Communications Commission told a conference that a decision on handling the C-band spectrum was a long way off.

Meanwhile, Wind Tre SPA’s issues saw a boost amid reports that the company is planning asset sales.

Real estate investment trust Uniti Group Inc.’s paper gained a day after releasing earnings and waiving a potential default.

In retail, Revlon, Inc.’s notes rose in the tail end of a tumultuous week.

Sector peer L Brands, Inc.’s issues ended Thursday mixed.

Oil futures were negative, spurring similar movement for California Resources Corp.’s paper while EP Energy Corp. and Halcon Resources Corp.’s notes closed higher.

Shipper Navios Maritime Holdings Inc.’s issues sustained a rise.

Intelsat falls

In the telecom space, Intelsat’s notes fell on Thursday, traders said.

Intelsat Jackson Holdings SA’s 5½% notes due 2023 lost 1 point to close at 88¾ bid. Intelsat (Luxembourg) SA’s 8 1/8% notes due 2023 dropped 4 points to close at 70¾ bid.

On Thursday, the Luxembourg-based satellite operator’s structure was pushed lower after FCC communications chairman Ajit Pai spoke at a communications summit, signaling that a final decision on how to manage the C-band spectrum is a long way off.

Saying that he hopes that a resolution can be reached at some point in the future, he specified that “it's important for us to make the right decision, not the right now decision.”

Last week, doubts were cast on whether Intelsat and other operators of C-band would be allowed full rein to manage the spectrum and allow mobile providers to use it, as some lawmakers spoke of nationalizing a portion of the billions in potential revenues.

“It didn’t provide a lot of clarity,” a trader said. “Most of these guys want this wrapped up and don’t want the government involved.”

Wind Tre up

Elsewhere in the sector, Wind Tre’s issues saw a boost, market sources said.

The 5% notes due 2026 gained 1¾ points to close at 90¾ bid.

This week, reports indicated that the Milan-based telecom name is preparing to sell off a significant portion of its data centers while setting up a new tower unit.

Uniti gains

Meanwhile, Uniti’s paper gained, traders said.

The 8¼% paper due 2023 picked up ½ point to close at 89 bid.

Late Wednesday, news broke that creditors of the Little Rock, Ark.-based real estate investment trust have waived a potential default.

Fears of a default arose after a report from auditor PricewaterhouseCoopers LLP resulted in a going-concern warning.

The company garners a majority of its business from Windstream, its former parent company that filed for bankruptcy in February.

“In the short term it looks like a good transaction,” a trader said.

To stave off a potential default, the company paid creditors a fee and interest rates on its loan were increased.

The company also issued its fourth-quarter earnings report on Wednesday, showing a 64 cents per share profit.

It also reported revenues of $270.8 million.

Revlon rises, L Brands mixed

Retailer Revlon’s notes were rising on Thursday, market sources said.

The 5¾% notes due 2021 tacked on 1½ points to close at 87½ bid.

On the back of a fourth-quarter earnings miss, the New York City-based cosmetics producer is working with its creditors to refinance $500 million of its 2021 bonds.

It reported an 86 cents per share loss, falling short of analyst predictions of a 15 cents per share loss.

Revenues were reported at $741.6 million.

Columbus, Ohio-based sector peer L Brands’ issues were mixed.

The 6¾% notes due 2036 shaved off ½ point to close at 84 bid. The 5¼% notes due 2028 jumped ¾ point to close at 89 bid.

Oil negative

While oil futures closed negative, distressed oil tranches were mixed, traders said.

Los Angeles-based independent oil and gas producer California Resources’ paper declined.

The 8% paper due 2022 fell 2 points to close at 79 bid.

Houston-based sector peer EP Energy’s notes were better.

The 7¾% notes due 2026 rose 1½ points to close at 80 bid. The 8% notes due 2024 picked up 3¼ points to close at 51¾ bid.

Houston-based producer Halcon’s issues also rose.

The 6¾% notes due 2025 gained ½ point to close at 60 bid.

West Texas Intermediate crude oil futures for May delivery lost 25 cents to close the session at $59.98 per barrel.

North Sea Brent crude oil futures for May delivery ended Thursday at $67.86 per barrel after losing 64 cents.

Navios better

Navios’ paper sustained a positive trend, market sources said.

The 7 3/8% notes due 2022 edged up ¼ point to close at 52¼ bid. The 11¼% notes due 2022 rose 1½ points to close at 67½ bid.

The Monaco-based shipping name extended its exchange offer for 946,100 of its American Depositary Shares representing its 8.75% series G cumulative redeemable perpetual preferred stock for a fourth time on Tuesday.

The exchange offer will now expire at 11:59 p.m. ET on March 29.

© 2015 Prospect News.
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