Digicel declines as early tender deadline extended; Community Choice loses as subsidiary prepares issue

By James McCandless

San Antonio, Sept. 7 – The distressed debt market finished a short week focusing on names with news surrounding them.

Digicel Group Ltd.’s notes declined as the company extended its early tender deadline for two series of notes.

Community Choice Financial Inc.’s issues fell as agencies assigned ratings to a new issue being offered by a subsidiary.

American Tire Distributors paper rose slightly. On Tuesday, the company announced it reached a recapitalization agreement with stakeholders.

Intelsat SA notes dropped. A subsidiary priced a $2 billion issue of six-year senior notes on Wednesday.

Frontier Communications Corp. issues improved. A disappointing second-quarter earnings report triggered a ratings downgrade.

Sanchez Energy Corp. paper gained in distressed energy trading.

Digicel down

Bermuda-based mobile phone network provider Digicel’s notes declined, traders said, as the company announced that it extended the early tender date for its previously announced exchange offers to 11:59 p.m. ET on Sept. 28.

The offer is for the existing 8¼% notes due 2020 for up to $2 billion of new 8¼% notes due 2022 and the existing 7 1/8% notes due 2022 for up to $1 billion of new 8¼% senior cash pay/payment-in-kind notes due 2024 to be issued by a subsidiary (see related story elsewhere in this issue).

The 6% notes due 2021 lost ¼ point to close at 91½ bid. The 7 1/8% notes due 2022 fell ¾ point to close at 59¼ bid.

On Thursday, the 6% notes gained 2¾ points and the 7 1/8% notes rose 3½ points.

Community Choice declines

Dublin, Ohio-based alternative financial services company Community Choice’s issues fell, market sources said, as agencies issued ratings for a subsidiary’s new $42 million offering of first-lien senior secured notes due 2020.

Moody’s Investors Service assigned a Caa2 rating to the new notes and affirmed the company’s corporate family and senior secured ratings. Standard & Poor’s assigned a CCC rating.

The 10¾% notes due 2019 dropped 1 point to close at around 81¾ bid.

American Tire gains

Huntersville, N.C.-based tire distributor American Tire’s paper improved, traders said. The company announced Tuesday that it had reached an agreement with 70% of its bondholders to convert their debt into a 95% stake of its restructured common equity, reducing its debt by $1.1 billion. The company is also working to extend the maturity of its revolving credit facilities and term loan.

On Wednesday, Moody’s Investors Service downgraded the company’s probability of default rating and senior subordinated notes rating. Standard & Poor’s lowered its long-term issuer credit rating and issue ratings on its senior subordinated notes.

The 10¼% paper due 2022 added about ¼ point to close at 29½ bid.

On Thursday, the 10¼% paper was level.

Volume names trade

Luxembourg-based satellite communications company Intelsat’s notes fell in Friday trading.

On Wednesday, as subsidiary Intelsat Jackson Holdings SA priced an offering of $2.25 billion of six-year senior notes with a concurrent plan to have a tender offer for its 7¼% senior notes due 2020.

The Intelsat Jackson 5½% notes due 2023 lost about ¾ point to close at around 90½ bid. The Intelsat (Luxembourg) SA 8 1/8% notes due 2023 fell 1 point to close at 85½ bid.

On Thursday, the 5½% notes lost ½ point and the 8 1/8% notes traded down about ½ point.

Norwalk, Conn.-based wireline communications name Frontier Communications issues rose.

A recent poor second-quarter earnings report led to Standard & Poor’s downgrading its issuer credit rating, senior unsecured debt rating and affirming a negative outlook.

The 7 5/8% notes due 2024 added about ¾ point to close at 63¼ bid. The 10½% notes due 2022 rose about ¾ point to close at around 87¾ bid. The 11% notes due 2025 gained about ½ point to close at around 76¾ bid.

On Thursday, the 7 5/8% notes gained about ¼ point, the 10½% notes were level and the 11% notes traded up about ¾ point.

Houston-based independent oil and gas producer Sanchez Energy paper ended the week rising. The company’s tranches have risen in the distressed energy sector over the last few months.

The 6 1/8% paper due 2023 rose about ¾ point to close at around 54¼ bid.

On Thursday, the 6 1/8% paper lost about 2½ points.

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