Intelsat sees gains for third straight session; Neiman down a ‘smidge’; Peabody pares loss; E&P mixed

By Colin Hanner

Chicago, Jan. 30 – Volume was low in the distressed arena again on Monday, traders said, with much of the focus on some popular high-yield names, though a distressed communication satellite company continued to build on a gain started at the end of last week.

“It was a lackluster day, besides Trump creating headlines left and right,” a trader said, referring to the buzz created by a series of executive orders on immigration that had an indirect impact on equity markets on the session. “[There was] not too much volume-wise.”

In distressed-land, Luxembourg-based Intelsat SA and its subsidiaries traded higher, and in some cases, by several points. Since Thursday, Intelsat has seen gains for at least one of its distressed notes.

Neiman Marcus Group, Inc. was down “a smidge” in one series of notes after a week of up-and-down movement for the troubled retailer.

Volume continued to be low for St. Louis-based coal company Peabody Energy Corp., yet it gained some of the steep losses felt on Friday, a trader said.

Offshore ultra-deepwater driller Pacific Drilling SA led gains among exploration and production companies, with GenOn Energy Corp. following with a modest gain of its own.

California Resources Corp. and MEG Energy Corp. felt the decline as oil future contracts dropped on the session.

And in healthcare and pharmaceuticals, movement was mixed but traded tight for Valeant Pharmaceuticals International, Inc. and Community Health Systems, Inc., among others.

All up for Intelsat

Capitalizing on a three-day gaining streak, traders have taken an upgrade by RBC Capital for Intelsat’s equities and put it into concrete gains for its distressed securities.

The most active out of the bunch was Intelsat Jackson Holdings SA’s 7¼% notes due 2019, which traded a “dozen times,” up 2¼ points to 86, a trader said. Another trader said the same paper was “pretty active” and traded up 1½ points to the same level.

A market source added that the notes were up 2¼ points to 86¼.

The similarly held 5½% notes due 2023 were up 1¾ points to 70, a trader said.

Intelsat Connect Finance SA’s 12½% notes due 2022 were up ¼ point to 62¼,

And Intel Luxembourg Holdings SA’s 8 1/8% notes due 2023 “rallied a bit,” a trader said, and were up 1 point to 32¾.

Neiman ‘softer’

The woes for Neiman Marcus Group continued Monday, though a small decrease changed the pace from last week when the first two sessions saw a several-point downswing-then-upswing for the retailer.

Neiman’s 8% notes due 2021 were a “smidge softer,” down 5/8 points to 63 1/8. Another trader said they were down to 63 and recalled them trading in the 64½ to 65 context at the end of last week.

Peabody reverses losses

On Friday, Peabody Energy Corp. saw about a 20-point decline in its 6½% notes due 2020 after the company announced that the disclosure agreement of its reorganization plan – in which holders of unsecured debenture claims will receive no distribution until holders of general unsecured claims are paid in full – was agreed upon.

After the weekend, the notes gained back some of those losses on small-volume trading said, a trader said, adding they were up 8 points to 38.

A market source said the same notes were up 7¼ points to 38¼.

“It seems like this is more in line with where they were trading prior to Friday’s selloff,” a trader said.

In E&P, a mixed bag

As Pacific Drilling’s equity prices lost 34 cents, or 9.14%, to $3.38 on the session, its distressed securities went the other direction.

The offshore driller’s 7¼% notes due 2017 were up 2¾ points to 57¾, a trader said, while the 5 3/8% notes due 2020 were up a ½ point to 52.

Last week, the company announced it reached an agreement to make amendments to its $500 million revolving credit facility and $1 billion senior secured credit facility.

The amendment to the revolver restricts the company’s ability to grant additional liens, to refinance existing debt and to change some terms of existing debt during the waiver period.

In other E&P companies, a trader said GenOn Energy’s 9½% notes due 2018 were up ¾ point to 76½.

For some regularly traded oil names that use oil future prices as a benchmark for movement, the past two sessions brought losses.

On Monday, West Texas Intermediate crude fell 1% to $52.57 on data from Baker Hughes Inc. that showed oil rigs rose to a notable year-and-a-half high, as well as data that showed U.S. crude is outputting more as Organization of Petroleum Countries are decreasing output.

California Resources’ 8% notes due 2022 were down “a little over a point” to 88¾, a trader said.

MEG Energy Corp.’s 7% notes due 2024 were down ¾ point to 94¼, a market source said.

In health and pharma

For the third-straight session, Valeant Pharmaceuticals saw another series of declines in the same area as prior days.

A trader said the 5 7/8% notes due 2023 were down ½ point to 76 3/8, while the 6 1/8% notes due 2025 were down 3/8 point to 75 5/8.

Fellow pharmaceutical company Endo Finance plc’s (Endo International plc) 5¾% notes due 2022 were down ½ point to 87.

Bucking the downward trend in pharmaceuticals were Concordia International Corp.’s 7% notes due 2023, which were up ½ point to 37½.

In healthcare, Community Health’s 6 7/8% notes due 2022 were down ½ point to 73, a market source said.

Distressed round-up

Marketing and retailer merchandiser Acosta, Inc.’s 7¾% notes due 2022 were up 1¾ points to 89½, a trader said.

And iHeartCommunications, Inc.’s 14% notes due 2021 were “up a scant” 1/8 point to 37¾, a market source said.

Marisa Wong contributed to this review

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