GEO, Talen, Nine Energy mostly flat; Intelsat Jackson sees thin trading; Endo lower

By Cristal Cody

Tupelo, Miss., May 11 – GEO Group Inc.’s bonds traded mostly flat to modestly higher on Tuesday in the distressed secondary market.

GEO’s 5 1/8% senior notes due 2023 (B1/B-) were steady at the 91¾ bid area in strong trading action over the day, a source said.

The Boca Raton, Fla.-based real estate investment trust that specializes in secure and processing facilities and electronic monitoring on Monday reported first-quarter income of $50.5 million, up from $25.2 million a year ago. Revenue totaled $576.4 million, down from $605 million in the same quarter last year.

GEO said in the earnings release the company was notified of federal and U.S. Marshals Service contracts that expired during the first quarter.

The company said it expects that its remaining secure services contracts will not be renewed when the contract periods expire starting November 2021 through September 2022.

In January, president Joe Biden instructed the U.S. Department of Justice to not renew contracts with privately operated prison operators.

Moody’s Investors Service and S&P Global Ratings downgraded the company on March 24.

GEO’s Justice Department detention facility contracts accounted for about 27% of its 2020 revenue, according to S&P.

Intelsat Jackson soft

Intelsat Jackson Holdings SA’s distressed bonds saw little to no secondary trading on Tuesday but have softened from Friday, a source said.

The 5½% senior notes due 2023 were last seen on Monday at 59 bid, down ¾ point from Friday.

Parent company Intelsat SA’s Chapter 11 bankruptcy statement hearing was adjourned until June 14, according to a notice on Monday.

The satellite operator announced in February that it reached a Chapter 11 bankruptcy restructuring plan that would reduce its debt to $7 billion from nearly $15 billion.

A hearing on the disclosure statement was scheduled for May 27.

Intelsat filed for Chapter 11 bankruptcy on May 4, 2020 in the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division.

Talen, Nine Energy active

Market tone was mixed with stock indices lower on Tuesday.

The iShares iBoxx High Yield Corporate Bond ETF closed down 9 cents to $87.04.

Oil prices headed higher during the session.

West Texas intermediate crude oil benchmark futures for June deliveries rose 36 cents to $65.28 a barrel.

North Sea Brent crude oil futures for July delivery rose 23 cents to settle at $68.55 a barrel.

The Woodlands, Tex., and Allentown, Pa.-based power company Talen Energy Supply LLC’s 6½% senior notes due 2025 (B3/CCC+/B) were flat to about ½ point softer at 87½ bid in heavy secondary action, a source said.

Houston-based oilfield services company Nine Energy Service, Inc.’s 8¾% notes due 2023 (Caa2/D) also were active. The notes traded flat at 41½ bid, a source said.

Endo notes decline

In the distressed pharmaceuticals sector, Endo Finance LLC’s 6% senior notes due 2028 (Caa2/CCC+) fell 2 points to 74¼ bid on Tuesday, a source said.

The notes traded at the start of the year at 84 bid.

Parent Dublin-based pharmaceuticals maker Endo International plc reported weaker first-quarter earnings results on Thursday.

Revenue fell to $717.92 million from $820.41 million in the year-ago period, while reported income from continuing operations dropped to $47.06 million from $157.58 million last year.

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