Intelsat notes active in telecom sector; PG&E lower amid restructuring negotiations

By James McCandless

San Antonio, Dec. 6 – The distressed debt space finished off the week with a continued focus on names backed by recent news.

Intelsat SA’s notes were flat to higher as the company grapples with the prospect of a public auction of C-band spectrum.

Sector peer Frontier Communications Corp.’s issues gained.

Utilities name PG&E Corp.’s paper fell on Friday as it contends with state officials over its restructuring process.

Meanwhile, in oil and gas, Chesapeake Energy Corp.’s notes rose as the company enacts measures to tackle its debt.

Meanwhile, Chaparral Energy, Inc.’s, McDermott International, Inc.’s notes improved amid higher oil prices as Valaris plc’s paper traded mixed.

In the retail space, Party City Holdco Inc.’s and Bed Bath & Beyond Inc.’s notes improved by the close.

Intelsat, Frontier eyed

Intelsat’s notes were flat to higher at the end of the week, traders said.

Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 were active but held level at 46 bid. The 9½% senior notes due 2023 picked up 1 point to close at 57¼ bid.

The Luxembourg-based satellite operator’s structure continued to operate in distressed territory as the U.S. government works on setting terms for a potential public option for C-band spectrum within the next year.

Federal Communications Commission chairman Ajit Pai announced last month his intention to hold a public auction for C-band spectrum. The move upended plans by Intelsat and two other satellite names – collectively known as the C-Band Alliance – to hold a private auction for the spectrum.

A bill in consideration in the U.S. Senate Commerce Committee would require 50% of the auction proceeds go toward the Treasury and mandate the auction to start no later than Dec. 31, 2020.

“We probably won’t see the final plan until the new year, so the impact on Intelsat is up in the air,” a trader said.

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

The 10½% senior notes due 2023 improved by ¼ point to close at 45¾ bid. The 11% senior notes due 2025 added 1 point to close at 46½ bid.

PG&E down

Utilities name PG&E’s paper fell on Friday, market sources said.

The 6.05% bonds due 2034 shaved off ¼ point to close at 104½ bid.

On Thursday, California governor Gavin Newsom criticized the San Francisco-based electric utility’s proposed $11 billion settlement with insurers, saying that the company should be focused on investing in better technologies and equipment upgrades.

Tensions between the state and the utility are high as more push for higher levels of regulatory oversight, including the potential for state-appointed board members.

In a separate matter, the company is nearing a $13.5 billion payout for wildfire victims.

Chesapeake rises

Meanwhile, in oil and gas, Chesapeake Energy’s notes rose, traders said.

The 5¾% senior notes due 2023 rose 1¼ points to close at 62½ bid. The 8% senior notes due 2025 gained ¾ point to close at 59½ bid.

This week, the Oklahoma City-based independent oil and gas producer announced a five-series exchange offer worth $1.5 billion.

Some conflict arose on Thursday after some holders of 7% paper, the last in the prioritization order in the offering, worried about oversubscription.

It concurrently set in motion a subsidiary tender offer for $617.81 million 6 7/8% senior notes due 2025.

The company’s actions are part of its plan to reduce its $10 billion debt.

Oil better

Oil futures spent the day gaining alongside distressed energy tranches, market sources said.

Crude futures pushed up after OPEC said that it would cut output by 500,000 barrels per day in early 2020.

West Texas Intermediate crude oil futures for January delivery shot up 77 cents to settle at $59.20 per barrel.

North Sea Brent crude oil futures for February delivery finished at $64.39 per barrel after a $1.00 gain.

Oklahoma City-based producer Chaparral Energy’s issues pushed upward.

The 8¾% senior notes due 2023 garnered ¼ point to close at 40¾ bid.

Houston-based oil and gas engineering name McDermott’s paper followed the sector.

The 10 5/8% senior notes due 2024 picked up ½ point to close at 9½ bid.

London-based contract driller Valaris’ notes saw mixed movements.

The 5.2% senior notes due 2025 dipped 2¼ points to close at 46 bid. The 7¾% senior notes due 2026 jumped up 2 points to close at 48¾ bid.

Party City, Bed Bath up

In the retail space, Party City’s issues improved, traders said.

The 6 1/8% senior notes due 2023 gained 1½ points to close at 78½ bid. The 6 5/8% senior notes due 2026 picked up 2¼ points to close at 60½ bid.

The Elmsford, N.Y.-based party supplies retailer’s structure has sunk into distressed territory in recent months after reporting a disappointing third-quarter, marred by declining sales and a helium shortage.

Union, N.J.-based peer Bed Bath & Beyond’s long-term paper saw similar trends.

The 5.165% senior paper due 2044 gained 1¾ points to close at 72½ bid. The 4.915% senior notes due 2034 rose 1¾ points to close at 74 bid.

© 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.