Intelsat rises on 5G development; Halcon gains despite ratings downgrade

By James McCandless

San Antonio, May 14 – The telecom sector and related names took up much of the distressed space’s attention during the Tuesday session.

Intelsat SA’s notes improved after news that an FCC Commissioner and members of the U.S. Senate were calling for fast action in monetizing the C-band spectrum.

Sector peer Frontier Communications Corp’s issues closed mixed.

Telecom-linked REIT Uniti Group, Inc.’s paper was in decline in the aftermath of its earnings report.

In energy, Halcon Resources Corp.’s notes were gaining despite a ratings downgrade.

Oil futures rebounded, though Superior Energy Services, Inc.’s and Hi-Crush Partners LP’s issues slipped as Weatherford International plc’s paper was mixed.

Retailer Bed Bath & Beyond, Inc.’s notes were also mixed a day after its chief executive officer resigned from his post.

Drug maker Teva Pharmaceutical Industries Ltd.’s issues were mixed.

Intelsat rises

Telecom name Intelsat’s notes rose throughout the session, traders said.

Intelsat Jackson Holdings SA’s 5½% notes due 2023 added 1 point to close at 90 bid. Intelsat (Luxembourg) SA’s 8 1/8% notes due 2023 gained 2¼ points to close at 77 bid.

The Luxembourg-based satellite provider has seen positive attention in the last few days after key United States government officials appear to favor fast tracking monetizing the C-band spectrum – part of which Intelsat controls.

On Monday, two senators influential in telecom legislation wrote to the F.C.C. urging for quick action.

F.C.C. Commissioner Michael O’Rielly came out in favor of the action and is set to testify in Congress accordingly.

“There’s been some uncertainty on this, but that’s because it’s just not a high-priority issue,” a trader said. “So the movement’s been slow, but nobody thought that this wouldn’t happen. There’s still a lot of money sunk into the name.”

In recent months, doubt had been cast on coming to a solution for use of the C-band spectrum and who receives what portion of the potential revenues generated.

Norwalk, Conn.-based sector peer Frontier’s issues closed the day mixed.

The 10½% notes due 2022 shaved off ½ point to close at 69 bid. The 11% notes due 2025 picked up ¼ point to close at 63¾ bid.

Uniti declines

Adjacent to telecom, Uniti’s paper declined, market sources said.

The 8¼% paper due 2023 fell 1½ points to close at 90 bid.

The Little Rock, Ark.-based telecom-linked real estate investment trust has seen a correction since an uptick after releasing first-quarter earnings results on May 10.

While the company outpaced analyst estimates by posting a 59 cents per share profit, questions about sustainability continue to be a thorn in the company’s side.

Its main source of revenue, Windstream Holdings, Inc., filed for bankruptcy in February.

“Because of that they missed on earnings,” a trader said. “Their main concern is going to be sustainability and how to get there. How much can they walk away from Windstream and to what extent do they even need to?”

Halcon up

Meanwhile, in energy, Halcon’s notes were on the rise, traders said.

The 6¾% notes due 2024 edged up ¼ point to close at 45¾ bid.

On Monday, S&P Global Ratings issued a downgrade for the Houston-based independent oil and gas producer.

The agency lowered the company’s issuer credit rating and unsecured debt rating in response to the name’s disclosure that it has hired financial advisors to conduct a strategic alternatives review.

It expects Halcon to default or make a distressed exchange in the near future.

Energy names vary

As oil futures saw a boost, distressed energy tranches saw mixed activity, market sources said.

Houston-based oilfield services provider Superior Energy’s issues slipped.

The 7 1/8% notes due 2021 lost 1½ points to close at 82½ bid.

Houston-based energy logistics name Hi-Crush’s paper moved similarly.

The 9½% paper due 2026 dropped 2½ points to close at 65½ bid.

Baar, Switzerland-based sector peer Weatherford, which is set to file for bankruptcy in the near future, ended the day mixed.

The 8¼% notes due 2023 shed ½ point to close at 61 bid. The 9 7/8% notes due 2024 added 1 point to close at 61½ bid.

As the Tuesday session came to a close, West Texas Intermediate crude oil futures for June delivery landed 74 cents higher at $61.78 per barrel.

North Sea Brent crude oil futures for July delivery finished at $71.24 per barrel after a $1.01 gain.

Bed Bath & Beyond mixed

Elsewhere, in retail, Bed Bath & Beyond’s issues were similarly mixed, traders said.

The 5.165% notes due 2044 declined by 1¼ points to close at 74¼ bid. The 4.915% notes due 2034 added 2 points to close at 77 bid.

On Monday, the Union, N.J.-based retail chain announced that chief executive officer Steven Temares stepped down from his post after continued pressure from a group of activist investors.

The group blamed upper management for its failure to adapt to a shifting retail environment and increase profits.

Teva mixed

Drug maker Teva’s paper also saw mixed results, market sources said.

The 4.1% paper due 2046 rose ¼ point to close at 70 bid. The 3.15% notes due 2026 slipped ½ point to close at 80½ bid.

On Monday, news broke that 44 states had filed an antitrust suit against the Petach Tikva-based generic pharmaceutical name and 19 other drug makers.

The suit alleges that the companies had formed a cartel that suppressed competition in the generic drug sector and inflated drug prices.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.