Frontier mixed as holder urges debt exchange; L Brands mixed in retail space

By James McCandless

San Antonio, June 21 – At the end of the week, the distressed space paid more attention to the telecom and retail sectors.

Frontier Communications Corp.’s notes were mixed as a major stakeholder warned the company against filing for bankruptcy.

Sector peer Intelsat SA’s issues also ended mixed.

In retail, L Brands, Inc.’s paper finished mixed a day after announcing the results of a four-series tender offer.

Pet retailer PetSmart, Inc.’s notes ended mixed.

Meanwhile, in energy, Ensco Rowan plc’s and Diamond Offshore Drilling, Inc.’s issues followed futures higher as Chaparral Energy, Inc.’s paper fell.

Elsewhere, in finance, Deutsche Bank AG’s notes spent a fourth straight day rising.

Helicopter operator Air Methods Corp.’s issues dipped.

Frontier, Intelsat mixed

Frontier’s notes were mixed during the Friday session, traders said.

The 10½% senior unsecured notes due 2022 shaved off ¼ point to close at 68¾ bid. The 11% notes due 2025, while moving as low as 61¼ bid during the day, closed level at 63 bid.

On Friday, Aurelius Capital Management sent an open letter to the Norwalk, Conn.-based wireline telecom name urging it to consider an alternative to bankruptcy.

Aurelius, a major holder, said that the company should start work on an out-of-court debt exchange before considering filing for Chapter 11, which the firm says would “result in a wipe-out for shareholders.”

The company has come under increasing pressure over the last few weeks to address its debt, starting with its 2022 maturities.

“They’re just worried about what they’re always worried about, and that’s getting paid,” a trader said.

After the close on Thursday, S&P Global Ratings lowered the company’s issuer credit rating and issue-level ratings.

The agency cited the recent appointment of board members with restructuring expertise as a signal that such an event could occur within the next 12 months.

Luxembourg-based sector peer Intelsat’s issues also ended mixed.

Intelsat Jackson Holdings SA’s 5½% notes due 2023 held level at 92 bid. Intelsat (Luxembourg) SA’s 8 1/8% notes due 2023 picked up ½ point to close at 79 bid.

L Brands, PetSmart mixed

In retail, L Brands’ paper finished mixed, market sources said.

The 6¾% senior unsecured paper due 2036 fell ½ point to close at 86¾ bid. The 5¼% paper due 2028 added ½ point to close at 90½ bid.

The Columbus, Ohio-based retailer saw heightened attention on Thursday after announcing the results of a tender offer for four series of notes.

The company received tenders for over $900 million from the four tranches combined.

The tender offers began on June 5, the same day that the company priced a $500 million issue of ten-year senior notes.

Phoenix-based pet supplies name PetSmart’s notes was another name to see varied activity.

The 8 7/8% senior unsecured notes due 2025 dropped 1 point to close at 95½ bid. The 5 7/8% notes due 2025 ended level at 96½ bid.

While the company’s structure had been riding high in the run-up to its initial public offering for e-commerce segment Chewy.com, in the week after the event it has been on a downward trend.

Oil futures higher

In a week marred by inflamed tensions between the United States and Iran, crude oil futures ended the week positive, traders said.

London-based contract driller Ensco Rowan’s issues moved upward.

The 5.2% senior unsecured notes due 2025 improved by ½ point to close at 70¼ bid. The 7¾% notes due 2026 gained ¾ point to close at 73¼ bid.

Houston-based driller Diamond Offshore’s paper also rose.

The 7 7/8% senior unsecured notes due 2025 added 2 points to close at 93½ bid.

Houston-based independent oil and gas producer Chaparral’s notes declined.

The 8¾% notes due 2023 slid ¾ point to close at 60 bid.

Oil futures saw a boost this week, with the tightening of relations between the United States and Iran being a major contributor to the trend.

West Texas Intermediate crude oil futures for August delivery rose 36 cents to end the week at $57.43 per barrel.

North Sea Brent crude oil futures for August delivery closed at $65.20 per barrel after a 75-cent shift upward.

Deutsche Bank rises

Finance name Deutsche Bank’s issues were on the rise again, market sources said.

The 4 7/8% senior subordinated unsecured notes due 2032 rose ¾ point to close at 86 bid.

The Frankfurt-based financial services provider is facing increased international scrutiny in more than one money laundering probe.

It is also under the microscope as it tries to enact a turnaround strategy and increase profitability.

Air Methods dips

Air Methods’ paper saw a dip by the end of the day, traders said.

The 8% senior unsecured paper due 2025 dropped 3½ points to close at 60¼ bid.

The Englewood, Colo.-based helicopter operator has endured market pressures as a number of peers have filed for bankruptcy over the last year.

The paper has been trading mostly in the 60’s context throughout 2019.

© 2015 Prospect News.
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