Intelsat trades higher as day’s volume-heavy issue; Hertz down on auto industry woes; oil, E&P on the up

By Colin Hanner

Chicago, April 4 – With much of the focus centering on new issues, the distressed market saw slightly wider movement on Tuesday, a trader said, with notable activity coming out of routinely traded issues.

“If you look at volume across all names, there’s not a lot that are printing,” a trader said. “There are some here and there.”

Satellite telecommunications company Intelsat SA and its subsidiaries were the most volume-worthy issues, traders said, and were up about ½ point across the board.

Rental car company Hertz Global Holdings, Inc. was down for the second-consecutive session, fueled by the disappointing outlook for the automotive industry.

“They [Hertz] were weak in the secondary [market] with the cars and retail,” a trader said.

Weak outlooks from major car companies on Monday may be the reason for the downward shift.

Higher oil prices did little to appease equities, and the sentiment was similar in the distressed market, as issuances were up fractionally on the session, including California Resources Corp.

Though poor retail news depressed other markets, there just wasn’t enough volume behind the distressed retail bonds to stir any substantial movement, a trader said.

Neiman Marcus Group Inc. and Gymboree Corp. were flat or down fractionally on the session.

Intel up

Up “in the neighborhood of a ½ point or so” across the board, Intelsat Jackson Holdings SA was generally higher on Tuesday’s session.

The 5½% notes due 2023 were up 1 point to 83½, a trader said.

And Intelsat Luxembourg Holdings SA’s 8 1/8% notes due 2023 were trading “around 61.”

On Monday, the general tone in the notes was flat to down, a trader said.

Hertz down, again

As industry sales for the automotive sector fell in March on Monday – bringing down industry giants Ford Motor Co., General Motor Co. and Fiat Chrysler Automobiles NV – Hertz Global still looked like it was reeling from the news.

The 5½% notes due 2024 were down “almost 2 points” to 84½, a trader said. That is on top of a 1-point decline the notes had on Monday.

E&P up

As oil had its most dramatic rise in nearly a month, climbing over $51, distressed exploration and production companies responded, though not as sharply as they had in sessions over the past week.

California Resources’ 8% notes due 2022 were up ¼ point to 81¾, a trader said, while a market source quoted the notes with an 80¼ bid, 81¼ offer.

Marine transportation service company GulfMark Offshore, Inc.’s 6 3/8% notes due 2022 were up 3/8 point to 50.

London-based offshore driller Ensco plc 5¾% notes due 2044 were up ¾ point to 75¾, while its 4½% notes due 2024 were up ½ point to 85½.

Swiss offshore contractor Transocean Ltd.’s 6.8% notes due 2038 were unchanged at 82¾.

Plano, Texas-based Denbury Resources Corp.’s 6 3/8% notes due 2021 were up ½ point to 83.

Seeing a significant uptick were Bonanza Creek Energy Inc.’s 6¾% notes due 2021, which were up “4-plus” points to 84, a trader said.

Retail woes

As brands Urban Outfitters Inc., L Brands Inc., and Payless ShoeSource Inc. suffered more woes on Tuesday that have been the general trend in the traditional retail landscape – the latter of those filed for Chapter 11 bankruptcy protection on Tuesday – distressed companies did not respond as they have in the past to similar news.

Neiman Marcus Group’s 8% notes due 2021 were unchanged at 60¾, a trader said.

And children’s retailer Gymboree Corp.’s 9 1/8% notes due 2018 were down 1/8 point to 5 3/8.

Elsewhere in the retail sector, Ralph Lauren Corp. announced the shuttering of one of its flagship stores in New York on Tuesday, according to a news release. That and other cost-trimming measures is expected to save the company $140 million in annualized expense savings, the news release said.

In health and pharma

Franklin, Tenn.-based Community Health Corp.’s 6 7/8% notes due 2022 were down 3/8 point to 85 7/8, a trader said, the second-consecutive session of losses.

This comes amid the resurgence of a new health care being debated in Congress currently, which could go before the House for a vote as early as Friday, according to various media outlets.

In pharmaceuticals, Concordia International Corp.’s 9% notes due 2022 were down 1½ points to 71, while Valeant Pharmaceuticals International Inc.’s 6 1/8% notes due 2025 were down 5/8 point to 75 5/8, a trader said.

Distressed roundup

iHeartCommunications, Inc. was “quiet” and traded flat on the session in its 14% notes due 2021, which remained at 33¼, a trader said.

And Akron, Ohio-based energy company FirstEnergy Corp.’s 6.8% notes due 2039 were down 3/8 point to 37 3/8, a trader said.

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