Intelsat gains on tender; Linn rises post-filing; Chesapeake plans debt-for-equity swap

By Stephanie N. Rotondo

Seattle, May 12 – A slew of fresh headlines were pushing around distressed bonds on Thursday.

A trader said Intelsat SA and Linn Energy LLC were “two of the more active names” in trading. Intelsat was busy after the company announced a tender offer via its subsidiary, Intelsat Jackson Holdings SA, for up to $625 million of three series of notes. Linn, for its part, traded actively – and better – following news the company, along with Berry Petroleum Co. LLC, had filed for Chapter 11 protections.

Linn’s filing, along with that of Penn Virginia Corp., pushed up the high-yield energy sector default rate to about 13%, compared to 10.7% at the end of April.

Chesapeake Energy Corp. was also in the news after announcing a debt-for-equity swap. Those bonds trended higher as well.

In other restructuring news, Denbury Resources Inc. paper improved in the wake of its announcement on Wednesday that it had swapped $922.5 million of notes for $531.2 million of new notes.

Intelsat’s movements aside, investors continued to focus on the commodity arena.

Yet another gain in crude oil was also helping energy sector preferreds initially inch upward, but paper eventually gave up their ground.

“Oil continues to eke up here,” a trader said.

Breitburn Energy Partners LP’s 8.25% series A cumulative redeemable perpetual preferred units (Nasdaq: BBEPP) were up in early trading, but later lost to finished off down over 5 cents, or 5.05%, at 97.8 cents.

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