Sears notes active after earnings release; Intelsat closes mixed amid tender offer

By James McCandless

San Antonio, Sept. 14 – The week in distressed debt trading came to a close with investor attention still fixed on names with news surrounding them.

Sears Holdings Corp.’s notes were active but level on Friday after the company released its second-quarter report late Thursday.

Intelsat SA’s notes closed mixed once again as a subsidiary continues a cash tender offer that commenced on Monday.

Community Choice Financial Inc.’s paper maintained a negative streak. Last Friday, the company closed on new financing worth $45 million.

Frontier Communications Corp.’s notes gained.

Sanchez Energy Corp.’s notes rose, continuing a trend of following oil futures.

Mallinckrodt plc’s paper improved in the medical space.

Sears flat

Sears’ notes ended Friday largely unchanged, traders said, despite active trading in the name.

The 6 5/8% notes due 2018 were level at around 92 bid.

On Thursday, the 6 5/8% notes rose about ¾ point and the 8% notes due 2019 lost 3 points.

After the close on Thursday, the company released its second-quarter earnings report, which the market had anticipated to show widening losses.

The company reported a loss of $4.68 per share, increasing from a loss of $2.33 per share in the second quarter of 2017.

“I can’t see any way up for them,” a trader said.

“Their sales just keep dropping. There’s nothing great in that report. I think bankruptcy is a real possibility in the next few quarters.”

Sears is a Hoffman Estates, Ill.-based department store chain.

Intelsat mixed

Intelsat’s notes closed the week mixed in the distressed telecom space, market sources said.

The Intelsat Jackson Holdings SA 5½% notes due 2023 rose about ½ point to close at around 91 bid. The Intelsat (Luxembourg) SA 8 1/8% notes due 2023 lost 2¼ points to close at 85¼ bid.

On Thursday, the 5½% notes fell ½ point and the 8 1/8% notes rose 2¼ points.

Intelsat Jackson recently priced $2.25 billion of six-year senior notes and also announced a cash tender offer for any and all of its $1,751,119,000 of 7¼% senior notes due 2020. The offer was scheduled set to expire at 5 p.m. ET on Friday.

Intelsat is a Luxembourg-based satellite communications company.

Community Choice falls

Meanwhile, Community Choice’s paper closed the week lower, market sources said, continuing a negative trend.

The 10¾% paper due 2019 shaved off about ¼ point to close at 80 bid.

On Thursday, the 10¾% paper lost ¾ point.

A week earlier, the company announced a new revolving credit facility for $45 million. The terms of the financing require an exchange of two-thirds of the company’s 10¾% senior secured notes due May 1, 2019 and its 12¾% senior secured notes due May 1, 2020 for equity by Nov. 30.

Last week, a subsidiary priced a $42 million offering of first-lien senior secured notes due 2020.

Community Choice is a Dublin, Ohio-based alternative financial services company.

Volume names trade

Also in distressed telecom, Frontier Communications’ notes improved.

The 7 5/8% notes due 2024 jumped up 1½ points to close at 66 bid. The 10½% notes due 2022 added ¼ point to close at 90 bid. The 11% notes due 2025 gained ¼ point to close at 80 bid.

Frontier is a Norwalk, Conn.-based wireline communications name.

Houston-based independent oil and gas producer Sanchez Energy’s issues rose, continuing to trend the same direction as oil futures.

The 6 1/8% notes due 2023 picked up about ¼ point to close at 54 bid.

In the medical space, Staines-upon-Thames, United Kingdom-based drug maker Mallinckrodt’s paper ended the week climbing.

The 4¾% paper due 2023 gained about 1½ points to close at 88½ bid.

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