Existing Intelsat issues lower after new deal sets in; E&P falls as oil enters bear market; Valeant reverses course

By Colin Hanner

Chicago, June 20 – Tuesday trading was generally confined to the buzz in and around Intelsat Jackson Holdings SA’s new $1.5 billion sale of eight-year senior notes, which came to market on Monday, as well as oil companies in the distressed debt market, a market source said.

Exiting Intelsat issues traded off on the day, a sharp contrast to the past few surging sessions.

In the distressed exploration and production space, “the usual suspects were the hardest hit,” a market source said.

California Resources Corp., EP Energy Corp. and Pacific Drilling Co. were just a handful of the many that got hit by falling oil prices on Tuesday, the first time that commodity has entered a bear market this year.

Valeant Pharmaceuticals International Inc. fell after bonds rose on Monday with the arrival of John Paulson to its board of directors, grocery retailer Fresh Market Inc. was fractionally higher after a downtick on Monday and iHeartCommunications, Inc. was lower on the session.

Intelsat lower

Gains that had kept up for two-straight sessions were put to a halt on Tuesday, as existing Intelsat Jackson bonds reversed course and traded lower following a mega deal from Monday.

Intelsat Jackson’s 7½% notes due 2021 were down 2 points to 92, a market source said.

Similarly-held 7¼% notes due 2020 were down 1¼ point to 94.

And its 5½% notes due 2023 down 1 point to 82½.

With proceeds of the new notes, Intelsat said it would redeem outstanding 7¼% notes due 2019 at par plus accrued interest. Those bonds were up 1/8 point to par and 1/8 on Tuesday.

E&P down as oil get bearish

Distressed E&P had little to do but follow oil prices as they tanked to the lowest mark this year.

West Texas Intermediate crude was down nearly $1 to $43.23.

Persistent pessimism surrounding the Organization of Petroleum Exporting Countries inability to curb the still-rising supply glut has fueled into investor worry as data continues to show continued increases in supply.

Last week, the Energy Information Agency reported weekly U.S. gasoline inventories saw an increase of 2.1 million barrels, “above the upper limit of the average range,” the agency said.

On Monday, media reports signaled that Libya kickstarted production in several of its dormant fields, adding to the resounding skepticism that oil will not bounce back to early-2017 levels anytime soon.

On the day, several distressed companies felt the blow.

California Resources Corp.’s 8% notes due 2022 were down 1 point to 61 7/8.

EP Energy Corp.’s 8% notes due 2025 were down 3 points to 72.

Oklahoma City-based oil and natural gas company, Continental Resources Inc., saw a 2¼-point plunge in its 4½% notes due 2023, which finished at 93½.

Oasis Petroleum Inc.’s 6 7/8% notes due 2022 were down 2½ points to 95.

Pacific Drilling’s 5 3/8% notes due 2020 were down 1½ points to 45½.

Candian oil sands producer MEG Energy Corp.’s 7% notes due 2024 were down 2½ points to 78.

And Plano, Texas-based Denbury Resources Corp.’s 6 3/8% notes due 2021 were down 2 points to 65½.

Offshore supply vessel operator Hornbeck Offshore Services, Inc., which replaced and upgraded its revolving credit facility on Friday, continued to fall on Tuesday following a several-point upsurge on Friday.

Its 5% notes due 2021 were down 1¼ points to 53 3/8.

And the 5 7/8% notes due 2020 were down 3½ points to 56.

Pharma movers

Following the arrival of John Paulson to Valeant’s board of directors, the pharmaceutical company traded down in its 5 7/8% notes due 2023. The notes were down ¼ point to 83½.

Endo International plc 6% notes due 2023 were unchanged at 85½.

And Concordia International Corp. saw one trade in both of its issues.

The 7% notes due 2023 were down 2 points to 18½, while the 9½% notes due 2022 were down 1 point to 20½, a market source said.

Distressed movers

Quieting from its busy Friday spurred by the Amazon Inc.’s acquisition of Whole Foods Inc., Fresh Market saw a ½-point uptick in its 9¾% notes due 2023, which finished at 81½ on “a dozen trades,” a market source said.

Cosmetic and personal care company Revlon Inc.’s 6¼% notes due 2024 were unchanged at 86¼.

And iHeartCommunications’ 9% notes due 2022 were down ½ point to 74½.

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