Intelsat notes mixed as subsidiary pursues tender offer; Community Choice notes dip

By James McCandless

San Antonio, Sept. 11 – Tuesday trading in the distressed debt market continued to surround names with recent news.

Intelsat SA’s notes were mixed after a subsidiary announced a cash tender offer on Monday for a series of outstanding senior notes due 2020.

Community Choice Financial Inc.’s notes declined. Last Friday, the company secured $45 million in financing.

Digicel Group Ltd.’s paper was also mixed. The company recently extended an early tender deadline for two series of notes.

Frontier Communications Corp.’s notes traded mixed after a recent second-quarter earnings report fell short of analyst expectations and led to a ratings downgrade.

Sanchez Energy Corp.’s issues gained with oil futures.

Mallinckrodt plc’s paper improved in the medical space.

Intelsat mixed

Intelsat’s notes ended mixed, traders said.

The Intelsat Jackson Holdings SA 5½% notes due 2023 lost about ¼ point to close at around 90¾ bid. The Intelsat (Luxembourg) SA 8 1/8% notes due 2023 rose about ¾ point to close at 86¾ bid.

On Monday, the 5½% notes picked up about ½ point and the 8 1/8% notes rose about ½ point.

“The paper keeps moving,” a trader said. “Our world turns on Intelsat, so to speak.”

Last Wednesday, Intelsat Jackson priced an upsized $2.25 billion of six-year senior notes and also announced the tender offer. The tender offer was predicated by the issuance of the new notes.

Intelsat is a Luxembourg-based satellite communications company.

Community Choice weakens

Community Choice’s issues declined in Tuesday trading, market sources said.

The 10¾% notes due 2019 lost about ½ point to close at around 81½ bid., reversing the ¼ point gain seen a day earlier.

Late Friday, the company announced that it had secured a new $45 million revolving credit facility. The terms of the financing require the company to exchange two-thirds of its 10¾% senior secured notes due May 1, 2019 and its 12¾% senior secured notes due May 1, 2020 for equity by Nov. 30.

Last week, a subsidiary issued a $42 million offering of first-lien senior secured notes due 2020.

Community Choice is a Dublin, Ohio-based alternative financial services company.

Digicel mixed

Elsewhere, Digicel’s paper was also mixed, according to traders.

The 8¼% paper due 2020 shed ¾ point to close at 72¾ bid. The 7 1/8% paper due 2022 gained about ¼ point to close at 60½ bid.

For the 7 1/8% paper, Tuesday’s gains were in addition to a 1 point improvement a day earlier.

On Friday, 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.

Digicel is a Bermuda-based mobile phone network provider.

Volume names trade

Frontier Communications’ notes were also mixed in distressed telecom trading.

The 7 5/8% notes due 2024 lost 1¼ points to close at 62½ bid. The 10½% notes due 2022 shaved off about ¼ point to close at around 87½ bid. The 11% notes due 2025 rose about ¼ point to close at around 77¼ bid.

On Monday, the 7 5/8% notes were up about ½ point, the 10½% notes were level and the 11% notes rose about ¼ point.

A recent second-quarter earnings report led S&P Global Ratings to downgrade Frontier’s issuer credit rating and senior unsecured debt rating and to affirm a negative outlook.

Frontier is a Norwalk, Conn.-based wireline communications company.

Meanwhile, Houston-based independent oil and gas producer Sanchez Energy’s notes improved in the secondary market.

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

The notes followed oil futures upward, maintaining a reputation as a bellwether in distressed energy trading.

In other trading, Staines-upon-Thames, U.K.-based drug maker Mallinckrodt’s 4¾% paper due 2023 picked up about ¼ point to close at 86¾ bid.

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