Intelsat higher on anticipated auction announcement; J.C. Penney rises in retail space

By James McCandless

San Antonio, Feb. 4 – The distressed debt space spent Tuesday focused on newsmakers in the telecom and retail sectors.

Intelsat SA’s notes shifted higher amid reports that the chairman of the Federal Communications Commission plans to formalize a C-band spectrum auction this week.

Sector peer Frontier Communications Corp.’s issues sustained a positive trend.

In the retail sector, J.C. Penney Co., Inc.’s paper rose a day after addressing delisting concerns and appointing a slate of new executives.

Department store name L Brands, Inc.’s notes improved.

More losses for oil futures resulted in dips for Antero Resources Corp.’s and Oasis Petroleum Inc.’s issues while Whiting Petroleum Corp.’s paper pushed upward.

Elsewhere, in utilities, PG&E Corp.’s notes trended better as it waits for California governor Gavin Newsom’s approval for its restructuring plan.

Steel producer United States Steel Corp.’s issues saw gains, riding a wave of positive attention after releasing its Q4 earnings.

Intelsat, Frontier higher

Intelsat’s notes shifted higher at the end of Tuesday, traders said.

Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 gained 3¼ points to close at 48¾ bid. The 9½% senior notes due 2023 jumped up 4¾ points to close at 62¼ bid.

The Luxembourg-based satellite operator’s structure saw more positivity amid reports that FCC chairman Ajit Pai is set to formally announce a C-band spectrum auction in a speech at a telecom event on Thursday.

Last week, Pai said that the matter would be voted on in a February FCC meeting.

In recent weeks, the U.S. government has been working to establish guidelines for the public auction, narrowing the amount of revenue that would go to satellite names as a result.

While the trade group C-Band Alliance estimates that the auction could produce as much as $77 billion in proceeds, current legislation being considered in the U.S. Senate would cap any payout toward operators at $5 billion.

“I think the bonds are recovering somewhat because we’re finally going to get some direction,” a trader said. “The last year has been all uncertainty.”

Norwalk, Conn.-based wireline name Frontier’s issues sustained a positive trend.

The 10½% senior notes due 2022 improved by ¾ point to close at 47¼ bid. The 11% senior notes due 2025 rose ½ point to close at 47 bid.

J.C. Penney rises

In the retail space, J.C. Penney’s paper was also on the rise, market sources said.

The 5 7/8% senior notes due 2023 garnered ½ point to close at 87½ bid. The 8 5/8% notes due 2025 tacked on 2 points to close at 57 bid.

The Plano, Tex., department store retailer announced recently that it had received a non-compliance warning for its common stock from the New York Stock Exchange.

In the mandated six months the company has to regain compliance, it plans to explore several options with shareholders, including a reverse stock split.

As part of its renewal plan, the company appointed several executives at the vice president level on Monday.

Columbus, Ohio-based sector peer L Brands’ notes improved.

The 6¾% senior notes due 2036 picked up 1 point to close at 98¾ bid. The 5¼% senior notes due 2028 rose ½ point to close at 99 bid.

Oil dips

More losses for oil futures resulted in a negative trend for distressed energy names, traders said.

West Texas Intermediate crude oil futures for March delivery shed 50 cents to settle at $49.61 per barrel.

North Sea Brent crude oil futures for April delivery ended at $53.96 per barrel after a 49 cent decline.

Denver-based independent oil and gas producer Antero Resources’ issues dipped.

The 5 1/8% senior notes due 2022 lost 1 point to close at 86 bid. The 5 5/8% senior notes due 2023 moved down 1¾ points to close at 70¼ bid.

Houston-based producer Oasis Petroleum’s paper moved with the sector trend.

The 6¼% senior notes due 2026 shed 1½ points to close at 73¾ bid. The 2 5/8% senior paper due 2023 gave back 3 points to close at 69 bid.

Whiting Petroleum, another Denver-based producer, saw its notes improve against the prevailing winds.

The 6¼% senior notes due 2023 tacked on 1¼ points to close at 70¾ bid. The 6 5/8% senior notes due 2026 gained 1¼ points to close at 58 bid.

PG&E better

Elsewhere, in utilities, PG&E’s issues trended better, market sources said.

The 6.05% notes due 2034 inched up ¼ point to close at 116¼ bid.

After submitting a reconfigured restructuring plan in bankruptcy court on Friday, the San Francisco-based bankrupt electric utility is waiting for a response from California governor Newsom.

While the plan has the support of a majority of the company’s creditors, it still needs Newsom’s approval.

One of the main changes would see changes in the makeup of the utility’s board of directors, requiring more safety experts and California residents.

Newsom has previously stated that if the plan does not meet state requirements and negotiations prove fruitless, the state is prepared to assume control over the utility.

U.S. Steel gains

Steel products name U.S. Steel’s paper saw gains, traders said.

The 6 7/8% senior notes due 2025 rose 3 points to close at 94½ bid. The 6¼% senior paper due 2026 was lifted ¾ point to close at 86¼ bid.

The Pittsburgh-based steel manufacturer’s structure has also seen improvements in recent days after last week’s better-than expected earnings report.

Where analysts were predicting a $1.14 per share loss, the company surprised with a 64 cents per share loss.

Revenues also outpaced expectations at $2.82 billion.

© 2015 Prospect News.
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