Intelsat trades actively, lower post-tender news; Linn continues to tick up; retail declines

By Stephanie N. Rotondo

Seattle, May 13 – Intelsat SA and Linn Energy LLC continued to dominate the distressed debt market on Friday.

For its part, Intelsat gave up the gains seen Thursday after the company announced it would exchange three series of notes at its Intelsat Jackson Holdings SA unit for up to $625 million in cash.

The exchange is being done at a discount to par.

Linn Energy, however, continued to push higher following word of the oil and gas producer’s bankruptcy filing. A trader noted that, given the filing, the bonds are trading flat, or without accrued interest.

Elsewhere in the distressed – or nearly distressed – space, retailers were taking a hit despite a Commerce Department report that showed a gain in retail sales in April.

The sector has been dragging of late, however, as retailers like Macy’s have reported weak quarterly results. JCPenney Co. Inc. followed that trend in its own report out Friday.

Revenue declined 1.6% to $2.81 billion, as sales dipped 0.4% – coming in below the company’s own expectations.

The good news was that cost-cutting efforts did help to narrow the quarterly loss to $68 million from $150 million.

One trader said the numbers were “disappointing,” seeing the 6 3/8% notes due 2036 slipping to 73½.

Neiman Marcus Group Inc. debt was also weaker. A trader said the 8¾% notes due 2021 weakened 2½ points to 70½.

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