Intelsat notes rise after Q4 earnings report; L Brands eyed amid asset sale, CEO exit

By James McCandless

San Antonio, Feb. 20 – The distressed debt market put its focus into shifting ground in the telecom and retail sectors.

Intelsat SA’s notes were on the rise after the company released mixed results in its fourth-quarter earnings report.

Sector peer Frontier Communications Corp.’s issues also tracked upward.

Meanwhile, retailer L Brands, Inc.’s paper varied in direction amid news of an executive departure and an asset sale.

Drug store name Rite Aid Corp.’s notes inched higher.

Drug producer Endo International plc’s issues improved following news of the appointment of a new chief executive.

Generics maker Mallinckrodt plc’s paper was under pressure.

Elsewhere, gains for oil futures reached Whiting Petroleum Corp.’s and Oasis Petroleum Inc.’s notes while Antero Resources Corp.’s issues diverged.

Intelsat, Frontier rise

Intelsat’s notes were on the rise as the day came to a close, traders said.

Intelsat Luxembourg SA’s 8 1/8% senior notes due 2023 picked up 1½ points to close at 46 bid. The 9½% senior notes due 2023 garnered 1¾ points to close at 67¼ bid.

On Thursday morning, the Luxembourg-based satellite operator released its fourth-quarter earnings report.

The company reported a loss of 81 cents per share, narrower than the 99 cents per share loss that was expected by analysts.

Revenues outpaced analyst predictions at $516.95 million.

“They’ve been stringing together a few good quarters,” a trader said. “If they can somehow wind up with more C-band auction revenue they can end the year in better shape.”

In the midst of its earnings, Intelsat has become embroiled in a dispute with counterpart SES as it seeks to increase the amount of revenue it receives from the C-band auction set to take place in December.

Intelsat said that it should take in more than $4.85 billion, which SES called “egregious.”

Norwalk, Conn.-based wireline communications name Frontier’s issues also tracked upward.

The 10½% senior notes due 2022 rose ½ point to close at 49½ bid. The 11% senior notes due 2025 gained ½ point to close at 50 bid.

L Brands varies

Meanwhile, retailer L Brands’ paper varied in direction, market sources said.

The 6¾% senior paper due 2036 held level at 104½ bid. The 5¼% senior notes due 2028 shed 2¾ points to close at 99¾ bid.

News broke on Thursday that the Columbus, Ohio-based retail name has sold a majority stake in Victoria’s Secret to private equity firm Sycamore Partners for $525 million.

L Brands will retain a 45% stake.

The arrangement gives Victoria’s Secret a valuation of $1.1 billion.

Concurrently, chief executive officer Leslie Wexner announced that he would resign from his position as well as his role as chairman of the board of directors.

Last year, the company began to receive pressure from an activist investor to sell off Victoria’s Secret.

Camp Hill, Pa.-based drug store chain Rite Aid’s notes inched higher.

The 6 1/8% senior notes due 2023 tacked on ¼ point to close at 94¼ bid.

Endo improves

In the pharmaceutical space, Endo’s issues were seen improving, traders said.

The 6% senior notes due 2025 rose ¼ point to close at 77¼ bid. The 6% senior notes due 2023 moved up ¼ point to close at 82¼ bid.

After the close on Wednesday, the Dublin-based pharmaceuticals producer announced that it had named company executive Blaise Coleman as its next president and CEO.

Coleman previously occupied the role of executive vice president and chief financial officer.

“I think what you have seen in the pharma sector in the last several months is less uncertainty,” a trader said. “That’s a positive that makes the long-term easier to build on.”

After the sector languished for months under the weight of litigation with thousands of entities over opioid-related claims, settlements have started to emerge.

Dublin-based generics maker Mallinckrodt’s paper spent the day under pressure.

The 5¾% senior notes due 2022 shaved off ¼ point to close at 58½ bid. The 5 5/8% senior paper due 2023 dipped 1 point to close at 48½ bid.

Oil futures gain

Elsewhere, gains for oil futures led to a positive prevailing trend in distressed energy tranches, market sources said.

West Texas Intermediate crude oil futures for March delivery were lifted 49 cents to settle at $53.78 per barrel.

North Sea Brent crude oil futures for April delivery finished at $59.31 per barrel after a 19 cent pickup.

Denver-based independent oil and gas producer Whiting Petroleum followed futures higher.

The 6¼% senior notes due 2023 shot up 1 point to close at 58½ bid. The 6 5/8% senior notes due 2026 improved by ¼ point to close at 50½ bid.

Houston-based producer Oasis Petroleum’s issues also joined the sector trend.

The 6¼% senior notes due 2026 jumped up 1¾ points to close at 74½ bid.

Antero Resources, another Denver-based producer, saw its paper diverge.

The 5 1/8% senior paper due 2022 slid ¾ point to close at 75¾ bid. The 5% senior notes due 2025 rose ¼ point to close at 60¾ bid.

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