Team Health steadies; Air Methods paper up; Talen climbs; Telesat notes improve

By Cristal Cody

Tupelo, Miss., Dec. 1 – Distressed names in the health care space held steady to higher in secondary action on Wednesday.

Team Health Holdings, Inc.’s 6 3/8% senior notes due 2025 (Caa3/CCC) were stable for a second day following the company’s court win against UnitedHealthcare Inc.

Air Methods Corp.’s 8% senior notes due 2025 (Caa3/CCC) rallied 1 1/8 points during the session.

Primary action returned to the high-grade and junk markets on Wednesday, while volatility remained high after the Centers for Disease Control reported the first confirmed case of the Covid-19 Omicron variant in the United States.

Stock indices were down over 1%.

The Chicago Board Options Exchange’s CBOE Volatility index jumped 14.45% to $31.12 after soaring 20.34% on Tuesday.

The iShares iBoxx High Yield Corporate Bond ETF edged up 1 cent to $85.37.

Oil prices were unchanged to lower a second day on Wednesday.

West Texas Intermediate crude oil benchmark futures for January deliveries settled down 61 cents at $65.57 a barrel after dropping $3.77 on Tuesday.

Talen Energy Supply LLC’s notes improved further ahead of the company’s earnings report on Thursday.

Looking at satellite names, Telesat Corp.’s 6½% senior notes due 2027 (Caa1/B) were up about 1½ points.

Intelsat Jackson Holdings SA’s bonds saw little activity in the secondary space in November and were quiet on Wednesday.

Team Health unchanged

Team Health’s 6 3/8% senior notes due 2025 (Caa3/CCC) were “staying around 88” bid in secondary action, a source said.

“Friday, they were down to 85 1/8,” the source noted.

The bonds rallied nearly 3 points on Monday after a Nevada court verdict in its favor in a lawsuit against UnitedHealthcare regarding underpayment of emergency room physicians.

Team Health said the jury will convene on Dec. 7 to award punitive damages.

The Knoxville, Tenn.-based medical staffing firm is owned by Blackstone Group LP.

Air Methods improves

New York-based ambulance service provider ASP AMC Holdings Inc.’s notes are trading about ½ point better since Friday after climbing 1 1/8 points over Wednesday’s session, a source said.

Subsidiaries Air Methods’ and ASP AMC Merger Sub Inc.’s 8% senior notes due 2025 (Caa3/CCC) were quoted at 79¾ bid in strong trading activity.

The issue wandered into the distressed secondary space after declining nearly 20 points from a 94 handle in October.

Talen bonds up

In other issues, Talen Energy’s 10½% senior notes due 2026 (Caa1/CCC/B-) jumped 2¼ points to 64 bid on more than $6.5 million of secondary supply on Wednesday, a source said.

The bonds have climbed about 3½ points since Friday.

The Woodlands, Tex., and Allentown, Pa.-based power company will hold its third-quarter conference call on Thursday.

Telesat recovering

Telesat’s notes were recovering this week after getting “crushed” in post-holiday trading on Friday, a source said.

Telesat Canada LLC’s 6½% senior notes due 2027 (Caa1/B) were up about 1½ points on Wednesday at 79½ bid.

The issue declined more than 4 points on Friday.

Ottawa-based satellite communications company Telesat’s stock began trading on the Nasdaq and Toronto Stock Exchange under the ticker “TSAT” following the company’s announcement on Nov. 19 that subsidiaries Telesat Canada and Loral Space & Communications Inc. completed their merger.

The company’s stock closed the day down $2.49 at $28.29.

Intelsat Jackson quiet

Intelsat Jackson Holdings’ 8½% senior notes due 2024 were last seen trading in the prior week at the 51 7/8 bid area, according to a market source.

The issue was mostly unchanged from where it ended October.

The McLean, Va.-based satellite operator, which filed for Chapter 11 on May 4, 2020 in the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division, was expected to exit bankruptcy by the end of the year.

Earlier in the year, Luxembourg-based parent company Intelsat SA reported it received support of key creditor groups to reduce its debt to $7 billion from nearly $15 billion under the Chapter 11 restructuring.

Distressed index weakens

Distressed index returns were soft over the first two sessions of the week.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return weakened to minus 0.65% on Tuesday from minus 0.15% on Monday.

Month-to-date total returns softened to minus 5.62% from minus 5% at the start of the week.

Year-to-date total returns declined to 21.77% on Tuesday from 22.57% on Monday.

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