Intelsat rises as company joins FCC plan; Hertz notes trade higher on economic hopes

By James McCandless

San Antonio, May 27 – During Wednesday’s distressed debt activity, the market focused in on the telecom and travel industries.

Intelsat SA’s notes were on the rise after the company announced it was participating in a C-band clearing plan.

Sector peer Frontier Communications Corp.’s issues were under water.

Meanwhile, vehicle rental name Hertz Global Holdings, Inc.’s paper was pushed higher on market hopes of a speedy economic recovery.

Utilities name PG&E Corp.’s notes were active but unchanged as the company enters into commitment letters for $10 billion in credit facilities.

In the oil and gas space, Oasis Petroleum Inc.’s issues diverged in the wake of its recent first-quarter earnings release.

As oil futures took a spill, Antero Resources Corp.’s paper mirrored that movement while Whiting Petroleum Corp.’s and Occidental Petroleum Corp.’s notes saw mixed activity.

Elsewhere, United Airlines Holdings, Inc.’s issues differed in direction.

Intelsat rises

Intelsat’s notes were on the rise on Wednesday, traders said.

Intelsat Jackson Holdings SA’s 5½% senior notes due 2023 picked up ½ point to close at 55 bid. The 9½% senior notes due 2023 improved by ¼ point to close at 26 bid.

After the close on Wednesday, the Luxembourg-based satellite operator announced that it decided to participate in the Federal Communications Commission’s accelerated C-band clearing plan.

The move designates certain airwaves that the company will offer up at an FCC auction scheduled to take place in December.

The company is set to receive about $4.85 billion in revenue from the auction.

Earlier in May, Intelsat filed for Chapter 11 bankruptcy after amassing about $15 billion in debt, pushing for funding to participate in the FCC auction.

“They look like they are poised to limp into that auction,” a trader said.

Norwalk, Conn.-based wireline communicator Frontier’s issues were under water.

The 10½% senior notes due 2022 were docked 2¼ points to close at 32¼ bid. The 11% senior notes due 2025 shaved off ½ point to close at 34½ bid.

Hertz higher

Meanwhile, car rental name Hertz’s paper was pushed higher, market sources said.

The 6¼% senior notes due 2022 added ¾ point to close at 16½ bid. The 5½% senior paper due 2024 gained 1¼ points to close at 16¾ bid.

The Estero, Fla.-based car rental company’s structure was pushed higher during the Wednesday session on increasing market optimism for a speedy economic recovery.

As coronavirus restrictions are gradually rescinded, the market has shown positivity toward heavily hit travel companies.

After the close, news broke that investor Carl Icahn has sold all 55.34 million shares that he owned in the company at a loss of about $1.6 billion.

Late last week, Hertz filed for Chapter 11 bankruptcy after failing to make lease payments and negotiating with creditors and banks.

PG&E active, flat

Utilities name PG&E’s notes were active but ultimately unchanged, traders said.

The 6.05% notes due 2034 held level at 113½ bid.

The San Francisco-based bankrupt electric utility’s subsidiary, Pacific Gas and Electric Co., entered into commitment letters with JPMorgan Chase Bank on Tuesday to provide for a $3.5 billion revolving credit facility and an up to $6 billion term loan, Prospect News reported.

The revolver will have a term of three years, subject to one-year extension options. The term loan will be comprised of two tranches, with terms of 364 days and 18 months.

After the Friday close, the company announced “overwhelming” acceptance of its reorganization plan after a count of preliminary votes from wildfire victims.

At the same time, a group of wildfire claimants filed a motion in bankruptcy court to appoint an examiner to examine “irregularities” in the vote procedure.

The company is expected to exit bankruptcy on June 30.

Oasis diverges

In the oil and gas space, Oasis Petroleum’s issues diverged in trading, market sources said.

The 6 7/8% senior notes due 2023 chalked off 3½ points to close at 13 bid. The 6 7/8% senior notes due 2022 rose 1½ points to close at 16 bid.

One of the more active energy names on Wednesday, the Houston-based independent oil and gas producer’s issues are bouncing off of lows triggered by last week’s first-quarter earnings release.

The company reported a loss per share of 20 cents, worse than the 17 cents per share loss that analysts had expected.

Revenues beat predictions at $387.8 million.

Oil dips

As oil futures took a spill, distressed energy tranches trended the same way, traders said.

West Texas Intermediate crude oil futures for July delivery were docked by $1.54 per barrel to finish at $32.81 per barrel.

North Sea Brent crude oil futures for July delivery ended at $34.74 per barrel after a $1.43 loss.

Denver-based producer Antero Resources’ paper mirrored the movements of futures.

The 5 1/8% senior notes due 2022 shed ¼ point to close at 71¾ bid. The 5 5/8% senior paper due 2023 dipped ¼ point to close at 61 bid.

Whiting Petroleum, another Denver-based producer, saw mixed activity for its notes.

The 6¼% senior notes due 2023 slipped 1½ points to close at 11¼ bid. The 6 5/8% senior notes due 2026 shifted up ¼ point to close at 11¾ bid.

Houston-based peer Occidental Petroleum’s issues also varied.

The 2.9% senior notes due 2024 lost 1¼ points to close at 78¾ bid. The 2.7% senior notes due 2022 gained ½ point to close at 91 bid.

United Airlines active

Elsewhere, United Airlines’ paper differed in direction, market sources said.

The 4¼% senior notes due 2022 picked up 1 point to close at 82½ bid. The 5% senior paper due 2024 lost ½ point to close at 75½.

The Chicago-based airline’s structure was another name to reap the benefits of the market’s economic recovery outlook, posting gains for the seventh straight trading day.

The United States continues to see a rising trend in air travel as government mandates to control the spread of the coronavirus are lifted.

© 2015 Prospect News.
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