Intelsat paper declines as 5G concerns persist; WeWork notes weaken on quarterly loss

By James McCandless

San Antonio, Nov. 14 – The Thursday distressed debt session saw a continued focus on the telecom and retail sectors.

Intelsat SA’s notes saw another decline as arguments over the handling of the sale of 5G usage persist.

Sector peer Frontier Communications Corp.’s issues varied in direction.

Coworking name WeWork Cos. Inc.’s paper moved negatively after reporting a $1.25 billion loss for the third quarter.

Meanwhile, in retail, Party City Holdco Inc.’s notes made a partial recovery after plunging in the aftermath of its third-quarter results.

Dairy name Dean Foods Co.’s issues were under pressure as bondholders reportedly came out against a proposed buyout.

Hospital operator Community Health Systems, Inc.’s paper diverged after a subsidiary announced early tender results.

As oil futures weakened, McDermott International, Inc.’s, Oceaneering International, Inc.’s and Antero Resources Corp.’s notes followed.

Intelsat down

Intelsat’s notes declined again in the telecom sector, traders said.

Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 dropped 5½ points to close at 64¼ bid. The 9½% senior notes due 2023 lost 1¼ points to close at 75¾ bid.

The two notes saw about $227 million total trading.

On Wednesday, the 8 1/8% notes lost 6¾ points.

The Luxembourg-based satellite operator has faced heightened scrutiny this week as the company and the U.S. government spar over how C-band spectrum, otherwise known as 5G, should be sold.

Several government officials have said that any auction should be made public while Intelsat, as part of the C-Band Alliance, argues that a private auction is the ideal route.

“They are trying to hold onto the potential revenues that would come with getting access to the spectrum,” a trader said.

Norwalk, Conn.-based wireline telecom name Frontier’s issues varied.

The 10½% senior notes due 2022 added ½ point to close at 43½ bid. The 11% senior notes due 2025 dipped 1 point to close at 42½ bid.

WeWork off

Coworking name WeWork’s paper saw negativity, market sources said.

The 7 7/8% senior notes due 2025 shed 2 points to close at 74½ bid.

After the close on Wednesday, news broke that the New York-based coworking startup told investors that it lost $1.25 billion in the third quarter. It also reported that its occupancy rate on its properties fell to 79%, its lowest in two years.

The company’s paper entered distressed territory in recent weeks after a shelved IPO led to the resignation of its chief executive officer and an $8 billion rescue package from large investor SoftBank.

Party City gains

Meanwhile, in retail, Party City’s notes saw a partial recovery, traders said.

The 6 1/8% senior notes due 2023 jumped up 13½ points to close at 71½ bid. The 6 5/8% senior notes due 2026 improved by 14¼ points to close at 65 bid.

The Elmsford, N.Y.-based party supplies retailer’s structure has deflated in recent days in the wake of a weak third-quarter earnings report and news of its largest shareholder distributing its entire stake.

“I thought that the negative movement this week was an overreaction,” a trader said. “The correction was inevitable.”

Thomas H. Lee Partners shifted its 35.7 million shares to limited partners of its funds.

The move means that Thomas H. Lee loses the right to make board nominations.

Dean Foods lower

Dairy name Dean Foods’ issues were under pressure, market sources said.

The 6½% senior notes due 2023 shaved off ¾ point to close at 19 bid.

In its first day of bankruptcy proceedings, the Dallas-based dairy products company obtained access to $50 million in debtor-in-possession financing on an interim basis, Prospect News reported.

Also in court, an attorney representing the company’s bondholders argued that a potential sale of the company to dairy cooperative Dairy Farmers of America is not “value-maximizing.”

The attorney advocated for other bidders to weigh in before committing to any quick transaction.

Community Health diverges

Elsewhere, hospital operator Community Health’s paper diverged, traders said.

The 6 7/8% senior notes due 2022 tacked on 2¾ points to close at 72¼ bid. The 8 1/8 senior notes due 2024 lost ¼ point to close at 78 bid.

During the Thursday session, a subsidiary of the Franklin, Tenn.-based hospital operator announced the early results of its offer to exchange any and all of its $2,632,000,000 of existing 6 7/8% senior notes due 2022 for two series of new notes.

As of the early tender deadline, $2,400,461,000, or 91.2% of the outstanding amount, of old notes were tendered in the exchange offer.

The new notes include $700 million of 8% senior secured notes due 2027 and up to $1,932,000,000 of 6 7/8% senior unsecured notes due 2028.

Oil names off

Distressed energy tranches followed oil futures downward, market sources said.

Crude oil futures were negative as the U.S. government reported higher inventories than expected.

West Texas Intermediate crude oil futures for December delivery shed 35 cents to $56.77 per barrel.

North Sea Brent crude oil futures for January delivery finished at $62.28 per barrel after a 9 cent loss.

Houston-based oil and gas engineering name McDermott’s notes traded down.

The 10 5/8% senior notes due 2024 dipped ½ point to close at 7¼ bid.

Houston-based sector peer Oceaneering International’s issues followed the trend.

The 6% senior notes due 2028 declined by 1¾ points to close at 86¼ bid. The 4.65% senior notes due 2024 slid ¼ point to close at 88 bid.

Denver-based independent oil and gas producer Antero Resources’ paper also declined.

The 5 5/8% senior notes due 2023 lost 1¼ points to close at 72¼ bid.

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