Chesapeake Energy eyed as term loan prices; Tenneco notes higher on private equity bid

By James McCandless

San Antonio, Dec. 10 – The distressed debt space saw more activity centered on energy and news-making names.

Chesapeake Energy Corp.’s notes varied in direction as the company prices a term loan and amended a cash tender offer.

As oil futures improved, EnLink Midstream, LLC’s, Whiting Petroleum Corp.’s and Antero Resources Corp.’s issues followed.

Meanwhile, Tenneco Inc.’s notes moved higher as the company receives a private equity bid for one of its segments.

Utilities name PG&E Corp.’s notes tapered off of recent gains after coming to a $13.5 billion settlement with wildfire victims.

Retailer Rite Aid Corp.’s issues edged lower.

Sector peer Bed Bath & Beyond Inc.’s paper shifted higher.

In telecom, Intelsat SA’s notes finished in a weaker position.

Chesapeake varies

Chesapeake Energy’s notes varied in direction on Tuesday, traders said.

The 8% senior notes due 2025 shed 1 point to close at 57 bid. The 8% senior notes due 2027 gained 1¾ points to close at 60 bid.

Early Tuesday, the Oklahoma City-based independent oil and gas producer announced the pricing of a $1.5 billion term loan that was launched earlier in the week.

The term loan will have a 4.5-year term and bear interest at a rate of Libor plus 800 basis points per annum and be issued at 98.

As previously reported, the proceeds will fund a tender offer for unsecured notes issued by subsidiaries Brazos Valley Longhorn LLC and Brazos Valley Longhorn Finance Corp.

Concurrently, the company said that the tender consideration in the offer was increased to $950 per $1,000 principal amount of existing notes from $920 per $1,000 principal amount, Prospect News reported.

Oil names up

Distressed energy tranches improved with oil futures, market sources said.

West Texas Intermediate crude oil futures for January delivery were elevated by 22 cents to settle at $59.24 per barrel.

North Sea Brent crude oil futures for February delivery finished at $64.34 per barrel after a 9 cent pickup.

Dallas-based midstream name EnLink’s issues followed futures upward.

The 4.85% senior notes due 2026 added 2¼ points to close at 92¼ bid.

Denver-based producer Whiting Petroleum’s paper joined the sector trend.

The 6 5/8% senior paper due 2026 improved by ¾ point to close at 62½ bid.

Antero Resources, another Denver-based producer, saw its notes move on a similar track.

The 5 1/8% senior notes due 2022 tacked on 2 points to close at 87 bid. The 5 5/8% senior notes due 2023 jumped up 3¼ points to close at 78 bid.

Tenneco higher

Meanwhile, in auto parts, Tenneco’s issues moved higher, traders said.

The 5% senior notes due 2026 garnered 3 points to close at 90 bid.

News broke on Tuesday that the Lake Forest, Ill.-based automotive parts maker has received a $4.3 billion bid from private equity name Apollo Global Management for its powertrain segment.

“The equity just launched today, but it might be premature,” a trader said. “There’s no guarantee that they’ll take the offer.”

Over the last year, the company has alternated in beating and missing earnings estimates and has cut its revenue projections three times.

PG&E off

Utilities name PG&E’s paper gave back part of its recent gains, market sources said.

The 6.05% bonds due 2034 shaved off ¼ point to close at 105¾ bid.

The San Francisco-based bankrupt electric utility’s structure continues to see heightened trading levels, buoyed most recently by Friday’s news that it had reached a $13.5 billion settlement with the official committee of tort claimants and with firms representing individual claimants who sustained losses from recent wildfires.

The deal is subject to the approval of a judge in bankruptcy court.

Rite Aid down

Retailer Rite Aid’s notes were under pressure through the session, traders said.

The Camp Hill, Pa.-based drug store chain’s 6 1/8% senior notes due 2023 lost ¼ point to close at 83 bid.

Union, N.J.-based retail chain Bed Bath & Beyond’s long-term issues performed better.

The 5.165% senior notes due 2044 inched up ¼ point to close at 70¾ bid. The 4.915% senior notes due 2034 gained ½ point to close at 75 bid.

Intelsat weaker

In the telecom space, Intelsat’s paper finished the afternoon in a weaker position, market sources said.

Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 dipped ½ point to close at 46 bid. The 9½% senior paper due 2023 fell ¾ point to close at 58 bid.

The Luxembourg-based satellite operator’s paper continues to be a mainstay in distressed activity, routinely making its mark in the sector.

The company is working with the U.S. government to participate in a C-band spectrum auction that is expected to take place next year.

After months of unsuccessful lobbying, the consortium of satellite names lost out on the opportunity for a private auction between the three members of the C-Band Alliance.

© 2015 Prospect News.
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