Endo, Teva under pressure; Intelsat drops; Cincinnati Bell recoups losses

By Abigail W. Adams

Portland, Me., July 15 – It was a quiet Monday in the distressed debt space with few names seeing notable trading activity, a market source said.

However, the capital structures of generic drug makers Endo International plc and Teva Pharmaceutical Industries Ltd. were under pressure due to an analyst downgrade of both companies’ stock.

Intelsat SA’s junk bonds were also under pressure as the Federal Communications Commission continues to mull proposals for making the C-band available for 5G.

After trading off in previous sessions, Cincinnati Bell Inc.’s 7% senior notes due 2024 recouped their losses in active trading on Monday.

Liabilities

Generic drug makers Endo International and Teva Pharmaceutical were under pressure on Monday with the stocks and bonds of the companies trading off following an analyst downgrade.

Endo’s 6% senior notes due 2023 dropped 1 point to trade down to 69½, a market source said.

Teva’s junk bonds also traded off about 1 point.

Teva’s 6¾% senior notes due 2024 traded down to close the day around 92.

More than $28 million of the bonds were on the tape by the late afternoon.

The 6.15% notes closed the day around 86 and the 3.15% senior notes due 2026 traded down 1 point to 77½, a source said.

The notes were trading down after a Morgan Stanley analyst downgraded the stock of both companies.

The downgrade was due to pricing pressure, increased competition in the generic drug space and the ongoing liability both companies face from opioid litigation.

Intelsat trades off

Intelsat’s junk bonds were also trading down on Monday as the FCC continues to mull proposals for the C-Band spectrum.

Intelsat’s 8 1/8% senior notes due 2023 were down 1¼ points to 75½, according to a market source.

More than $11.5 million of the bonds were on the tape by the late afternoon.

The 5½% senior notes due 2023 were down 3/8 point to 90 7/8 with about $11 million of the bonds on the tape.

Intelsat is one of four companies that have formed the C-Band Alliance to lobby the Federal Communications Commission to auction off the C-Band spectrum to wireless carriers for the adoption of 5G in the United States.

However, the C-Band Alliance has been met with a series of roadblocks as legislators and private interest groups have opposed the proposal.

Cincinnati Bell rebounds

Cincinnati Bell’s 7% senior notes due 2024 were on the rise in active trading on Monday after the notes traded off in previous sessions.

The 7% notes rose 2½ points to close Monday at 87¾, according to a market source. The bonds saw more than $8 million in reported volume during the session.

Cincinnati Bell announced on Monday that it would report second quarter earnings on Aug. 8.

Analysts are expecting a year-over-year increase in second-quarter revenue for the communications company.

The notes traded down to an 84 handle in the middle of last week after an analyst downgrade of the company’s stock.

However, the notes have regained their footing since last Friday.

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