Community Health volume remains high amid debt maneuvers; Windstream notes trade up after acquisition

By James McCandless

San Antonio, March 27 – The distressed debt market experienced another slow day in trading Tuesday, market sources confirmed, as investors remained reluctant to jump into the market on a holiday week.

Community Health Systems, Inc. notes continued their stretch of high volume. On Tuesday, the company entered into its fourth amendment to its credit agreement.

Windstream Holdings, Inc. issues became active as the company announced the acquisition of networking solutions name MASS Communications.

Frontier Communications Corp. paper finished another day as a leader in the distressed telecom space on the back of positive news.

Intelsat SA continued to provide more volume in telecom. Elsewhere in the healthcare sector, Mallinckrodt plc remained in high volume. Sears Holdings Corp., Inc. and Revlon, Inc. contributed volume from the distressed retail space.

Community Health leads

Franklin, Tenn.-based hospital operator Community Health Systems saw more trading Tuesday, market sources confirmed, as the company is in the midst of enacting several strategies to fix its debt problem. On Monday the company, along with wholly owned subsidiary CHS/Community Health Systems, Inc. entered into its fourth amendment to its credit agreement.

Other moves include refinancing of its near-term bond maturities, using proceeds from divestitures to repay term loan debt, and hiring asset management firm Lazard, Citibank and JPMorgan Chase as debt advisers.

The 7 1/8% notes due 2020 gained 1¼ points to close at 81¼ bid. The 6 7/8% notes due 2022 shaved off ¼ point to close at 57 bid.

Windstream moves on acquisition

Issues in Little Rock, Ark.-based communications solutions name Windstream saw an uptick in activity as the company announced the $37.5 million cash acquisition of New York City-based networking solutions company MASS Communications, Inc. In a release Windstream Enterprise & Wholesale president Layne Levine praised the deal as a way to offer customers a broader portfolio of services.

“This acquisition adds a well-run company with a customer-first mindset and an impressive track record of growing revenue to Windstream,” Levine said.

The 7¾% issues due 2021 jumped up about 3 points to close at 74¼ bid. The 6 3/8% issues due 2023 rose about ¼ point to close at 57¾ bid.

Frontier active

Norwalk, Conn.-based wireline telecom name Frontier Communications paper traded highly another day as recent moves made to focus on bringing down its debt have been received in a positive light, traders confirmed.

“It trades every day and most notes have been trending positively recently,” a trader said.

The 7 5/8% paper due 2024 climbed 1 point to close at 63¼ bid. The 10½% paper due 2022 fell 3¼ points to close at 83 bid. The 11% paper due 2025 lost ¾ point to close at 76½ bid.

Volume names trade

More volume in distressed telecom was seen in Luxembourg-based satellite communications company Intelsat.

The Intelsat Jackson SA 5½% notes due 2023 rose about ¼ point to close just above 80½ bid. The 7¼% notes due 2020 ticked up ¼ point to close at 92¾ bid.

Britain-based drug maker Mallinckrodt remained another favorites in the distressed healthcare space.

The 4¾% issues due 2023 traded down about ¼ bid to close at around 77½ bid.

Weak retail names also provided for some of the day’s volume.

Hoffman Estates, Ill.-based department store chain Sears saw its 6 5/8% paper due 2018 hike up about 3 points to close at 69 bid.

New York City-based cosmetics producer Revlon saw more movement. Its 5¾% notes due 2021 rose about ¼ point to close at 76¾ bid. The 6¼% notes due 2024 traded up about 3½ points to close at just above 63¾ bid.

“There really is nothing moving besides the go-go names,” a trader said. “Unless some major news happens between now and Thursday the week is pretty much a wash.”

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