Intelsat notes trade down as financing sought; Revlon falls after term loan launched

By James McCandless

San Antonio, April 14 – The distressed debt space spent Tuesday focused on newsmakers in the telecom and retail spaces.

Intelsat SA’s notes were pushed downward as the company seeks debtor-in-possession financing to hold itself over while waiting for a C-band spectrum auction.

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

Meanwhile, in retail, Revlon, Inc.’s paper fell as a subsidiary launched a senior secured first-lien term loan.

Department store name L Brands, Inc.’s notes diverged.

In the oil and gas space, Chesapeake Energy Corp.’s issues declined after the company’s board of directors voted to approve a reverse stock split.

As oil futures faltered, Occidental Petroleum Corp.’s and Whiting Petroleum Corp.’s paper slipped while Valaris plc’s notes moved higher.

Elsewhere, in utilities, PG&E Corp.’s issues rose as the company’s vote on its restructuring plan gets underway.

Intelsat down

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

Intelsat Jackson Holdings SA’s 8½% senior notes due 2024 lost 3¼ points to close at 58¾ bid. The 5½% senior notes due 2023 dipped 2¾ points to close at 56¾ bid.

The two tranches combined saw about $50 million trading.

During the session, news broke that the Luxembourg-based satellite operator is searching for financial backers for a DIP loan of about $750 million.

The money would guarantee the continuance of essential operations as it waits to receive as much as $4.85 billion in a C-band spectrum auction.

The company currently holds about $14 billion in debt.

“Normally the process before the filing is pretty private,” a trader said. “But it’s not an indication of when they might file.”

On Monday, the company withdrew its guidance for the fiscal year and subsequent years and delayed its quarterly report to June.

Norwalk, Conn.-based wireline communicator Frontier’s issues varied in direction.

The 10½% senior notes due 2022 picked up 1 point to close at 30 bid. The 11% senior notes due 2025 held level at 30 bid.

Revlon notes fall

Meanwhile, in retail, Revlon’s paper took a fall, market sources said.

The 5¾% senior notes due 2021 crashed 21¼ points to close at 58½ bid. The 6¼% senior paper due 2024 shaved off ¼ point to close at 24¾ bid.

The New York-based cosmetics producer announced on Tuesday that subsidiary Revlon Consumer Products Corp. has launched an $850 million senior secured first-lien term loan due June 30, 2025.

Price talk on the term loan is Libor plus 1,050 basis points plus 2% PIK, the source said. The term loan is also talked with a 1.5% Libor floor and a par issue price.

Last month, the company entered into a binding commitment letter with Jefferies Finance LLC as administrative agent for the term loan.

Columbus, Ohio-based department store name L Brands’ notes diverged.

The 6¾% senior notes due 2036 gained 2½ points to close at 79½ bid. The 5¼% senior notes due 2028 jumped up 4 points to close at 76 bid.

Chesapeake off

In the oil and gas space, Chesapeake Energy’s issues declined, traders said.

The 11½% notes due 2025 slipped 1 point to close at 11¼ bid. The 8% senior notes due 2025 gave back 3 points to close at 7 bid.

After the close on Monday, the Oklahoma City-based independent oil and gas producer announced that its shareholders and board of directors voted to approve a reverse stock split to regain New York Stock Exchange listing compliance.

The board decided that the reverse split would be at a ratio of one share for every 200 existing shares.

The range was originally considered at one to 50 to one to 200 shares.

On Wednesday, 22.5 million of the shares will trade, representing a 9.784 million share reduction.

The company is consulting with restructuring advisers on handling its $9 billion in debt.

Oil falters

As oil futures faltered, distressed energy names largely followed the trend, market sources said.

The decline was preempted by market worries that a decrease in energy demand would outweigh recently agreed supply cuts.

West Texas Intermediate crude oil futures for May delivery lopped off $2.30 to settle at $20.11 per barrel.

North Sea Brent crude oil futures for June delivery finished at $29.60 per barrel after a $2.14 shave.

Houston-based producer Occidental Petroleum’s paper dipped.

The 2.9% senior notes due 2024 moved down by ¾ point to close at 76½ bid. The 2.7% senior paper due 2022 lost 3 points to close at 83 bid.

Denver-based peer Whiting Petroleum’s notes were also off kilter.

The 6¼% senior notes due 2023 declined by ½ point to close at 10 bid. The 6 5/8% senior notes due 2026 trailed by ¼ point to close at 10 bid.

London-based contract driller Valaris’ issues improved, bucking the prevailing trend.

The 5.2% senior notes due 2025 picked up 1¾ points to close at 14 bid. The 7¾% senior notes due 2026 rose 1½ points to close at 14 bid.

PG&E up

Elsewhere, in utilities, PG&E’s issues spent the day on the rise, traders said.

The 6.05% notes due 2034 were lifted 7¼ points to close at 108¼ bid.

Last week, ahead of a vote for the San Francisco-based bankrupt electric utility’s restructuring plan, the company received statements of continued support for the agreement from wildfire victims.

The company said that the current plan would lead to its emergence on June 30 positioned to pay victims and protect customers.

The judge in its bankruptcy case dismissed challenges to the vote last week.

A timely exit from bankruptcy would allow the utility to participate in California’s newly organized wildfire victims fund.

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