Ultra Petroleum falls after posting production numbers; Community Choice notes improve

By James McCandless

San Antonio, April 19 – The distressed debt market was described as “dead” on Thursday with very few names trading.

Ultra Petroleum Corp.’s notes saw a decline after receiving attention as it posts its Q1 production numbers and reaffirms its borrowing base.

Community Choice Financial Inc.’s notes traded up as traders and investors deliberate on when the company will decide to restructure.

Community Health Systems, Inc.’s paper was mixed after the company announced Wednesday that it had entering into an agreement to sell another hospital as part of its divestiture plan.

Intelsat SA’s notes were mixed as news from earlier in the week about being part of a government project drives trading. Frontier Communications Corp.’s note issues were mixed as the search for buyers for certain assets continues. EP Energy, Inc.’s paper was mixed Thursday, mirroring oil futures.

Ultra Petroleum down

Houston-based independent oil and gas name Ultra Petroleum saw its notes decline as the company announced Q1 production numbers, traders confirmed, exceeding the midpoint of its guidance. It also amended its credit agreement to account for a higher maximum net leverage covenant to 4.50 from 4.25 times.

“Their Q1 stuff, along with the volatile day that oil had, really put a lot of downward pressure on the bonds,” a trader said.

The 7 1/8% notes due 2025 lost 2½ points to close at 73¼ bid. The 6 7/8% notes due 2022 shaved off ¾ point to close at 79½ bid.

Community Choice up

Dublin, Ohio-based financial services company Community Choice traded up, traders confirmed, as investors speculate over when it will announce a restructuring to solve its debt problem.

“I’m sure we’re going to hear any day now about how they’ve hired Lazard or someone to help them out with their restructure,” a trader said.

The 10¾% notes due 2019 shot up about 4¼ points to close at around 71½ bid.

Community Health mixed

Community Health Systems’ paper ended mixed, a market source confirmed, as the Franklin, Tenn.-based hospital operator announced Wednesday that it had signed an agreement to sell a Florida hospital to Florida Hospital Ocala, Inc., a subsidiary of Adventist Health System Sunbelt Healthcare Corp.

The sale, expected to be finalized in the third quarter of 2018, is the latest asset sale in a planned series of divestitures in order to quell its debt issues.

The 7 1/8% paper due 2020 rose about 3¼ points to close at around 84¼ bid. The 6 7/8% paper due 2022 fell ¾ point to close at 56 bid.

The 7 1/8% paper lost about 1 point and the 6 7/8% paper lost ¼ point on Wednesday.

Volume names trade

Luxembourg-based satellite communications company Intelsat’s notes were mixed after the company announced a subsidiary’s involvement in a satellite payload project for the Federal Aviation Administration.

The Intelsat Jackson SA 5½% notes due 2023 edged down ¼ point to close at 84¼ bid. The 7¼% notes due 2020 gained ¼ point to close at 97¼ bid.

Norwalk, Conn.-based wireline telecom name Frontier Communications’s issues were mixed as the search for buyers of certain assets continues.

The 7 5/8% notes due 2024 gained about 1 point to close at around 65½ bid. The 10½% notes due 2022 rose about 2¼ points to close at around 90 bid. The 11% notes due 2025 traded down 1 point to close at 78 bid.

Houston-based independent oil and gas producer EP Energy’s paper was mixed, following oil futures.

The 7¾% paper due 2022 lost 1 point to close at 68 bid. The 6 3/8% paper due 2023 remained level at about 55 bid.

“It was pretty dead today,” a trader said. “The week is pretty much a wash at this point. Next week could be better as long as equity markets are calm.”

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