Intelsat rises despite earnings miss; FirstEnergy gains as earnings beat estimates

By James McCandless

San Antonio, Feb. 20 – The distressed space continued to place its attention on names releasing earnings reports.

Intelsat SA’s notes moved higher despite the company reporting a loss in its fourth-quarter earnings report.

Elsewhere in the sector, Windstream Holdings Inc.’s issues continued to leak after losing a legal challenge.

Meanwhile, FirstEnergy Solutions Corp., a subsidiary of FirstEnergy Corp., saw its paper gain as the parent company surpassed estimates on its Q4 report.

Drug maker Teva Pharmaceutical Industries Ltd.’s notes were better after settling with the United States government over consumer access to its products.

PHI, Inc.’s issues continued to sink as time is running out to find a solution to its debt problem.

Positive oil futures did not spread movement to distressed energy names. McDermott International, Inc.’s paper went lower, California Resources Corp.’s notes closed mixed and Ensco plc’s issues traded up.

Hexion Inc.’s paper closed the day mixed.

Intelsat rises

Intelsat’s notes were better on Wednesday despite its earnings report, traders said.

Intelsat Jackson Holdings SA’s 5½% notes due 2023 picked up ¾ point to close at 91 bid. Intelsat (Luxembourg) SA’s 8 1/8% notes due 2023 rose 1¾ points to close at 84 bid.

Early Wednesday, the Luxembourg-based satellite operator released its fourth-quarter earnings report.

The company showed an 81 cents per share loss, far below analyst estimates of a 26 cents per share loss.

Below the surface, it reported a reduction in capital spending and a free cash flow of $88.5 million.

“Just focusing on the top line, they should have dropped on all accounts,” a trader said. “But, there were bright spots.”

Windstream off

Sector peer Windstream’s issues were worse off, market sources said.

The 8¼% notes due 2023 shed 1½ points to close at 79½ bid. The 7¾% notes due 2021 traded down 3 points to close at 39½ bid.

The Little Rock, Ark.-based rural telecom name’s structure entered free fall after the company announced that it had lost a legal challenge brought by Aurelius Capital Management over whether the company defaulted on its bonds in 2015.

While Aurelius is entitled to a $310 million judgment, according to the court, Windstream plans to appeal the case.

FirstEnergy up

Meanwhile, FirstEnergy Solutions’ paper was better, traders said.

The 6.85% paper due 2034 picked up ½ point to close at 85½ bid. The 6.05% paper due 2021 added 2 points to close at 87 bid.

The subsidiary of the Akron, Ohio-based utility’s paper rose in reaction to its parent company releasing its fourth-quarter numbers late Tuesday.

It reported a profit of 50 cents per share, narrowly beating analyst predictions of 48 cents per share.

Revenues were also better than expected at $2.71 billion.

Teva higher

In the medical space, Teva’s notes moved upward, market sources said.

The 3.15% notes due 2026 gained ½ point to close at 82¾ bid. The 4.1% notes due 2046 rose ¾ point to close at 72½ bid.

News broke late Tuesday that the Petach Tikva, Israel-based generic drug maker had reached a settlement with the United States Federal Trade Commission over allegations that Teva and rival companies had restricted consumer access to its generic versions of drugs.

“Pay for delay” settlements restricted companies like Teva from releasing generic drugs for a certain period of time, compensating generic rivals to delay releasing products that have come off patent.

The company is not allowed to enter into such agreements in the future.

PHI slides

Energy name PHI’s issues were worse off, traders said.

The 5¼% notes due 2019 fell 1½ points to close at 64¾ bid.

The Lafayette, La.-based offshore helicopter name is facing mounting pressure from stakeholders to come to a resolution on refinancing its 5¼% notes that are due next month.

While the company provided an update on its ongoing strategic alternative review, it did not provide many specifics.

“We don’t know where they’ll land,” a trader said. “It’s likely that they still don’t know.”

Oil names mixed

Despite another consecutive day of rising oil futures, popular distressed oil names were mixed in the day’s activity, market sources said.

Houston-based oil and gas engineering name McDermott’s paper moved lower.

The 10 5/8% notes due 2024 shaved off ¾ point to close at 78¼ bid.

Los Angeles-based independent oil and gas producer California Resources’ notes were mixed.

The 6% notes due 2024 held level at 68½ bid. The 8% notes due 2022 dropped 1 point to close at 81 bid.

London-based contract driller Ensco’s issues struck a positive trend.

The 7¾% notes due 2026 moved up ¼ point to close at 84¼ bid. The 7.2% notes due 2027 jumped ¾ point to close at 81¼ bid.

West Texas Intermediate crude oil futures for March delivery picked up 83 cents to end the session at $56.92 per barrel.

North Sea Brent crude futures for April delivery closed at $67.08 per barrel after gaining 63 cents.

Hexion mixed

Hexion’s paper moved in different directions, traders said.

The 6 5/8% paper due 2020 posted a ½ point gain to close at 83½ bid. The 9% paper due 2020 crashed 6½% points to close at 34½ bid.

The Columbus, Ohio’s chemicals maker’s structure has been under pressure as second-lien holders work to protect their interests when more than $2.4 billion of its maturities come due next year.

The noteholders have been pressuring the company to come up with more collateral by selling various assets.

© 2015 Prospect News.
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