Digicel notes plummet as exchange offer gets underway; Diebold falls after credit agreement amended

By James McCandless

San Antonio, Sept. 4 – A short week in trading in the distressed debt market saw the focus remain largely on names that saw the most attention last week.

Digicel Group Ltd.’s notes plummeted Tuesday. On Friday, the company announced an exchange offer for certain notes, leading to a ratings downgrade.

Diebold Nixdorf, Inc.’s issues also declined. On Thursday, the company announced that it had amended its credit agreement.

Sanchez Energy Corp.’s paper fell as energy names continue to see more volume amid a tumultuous time in the energy sector.

Intelsat SA’s notes started the short week mixed. A subsidiary recently priced a $1.25 billion issue of senior notes.

Frontier Communications Corp.’s issues were also mixed. A disappointing second-quarter earnings report fell short of analyst estimates and led to a ratings downgrade.

Community Choice Financial Inc.’s notes declined on increased attention.

Digicel drops

Bermuda-based mobile phone network provider Digicel notes plummeted, traders said. On Friday, the company announced an exchange offer for any and all of its outstanding $2 billion 8¼% notes due 2020 and any and all of its outstanding $1 billion 7 1/8% notes due 2022 for new notes to be issued by its subsidiaries.

Following the announcement, Moody’s Investors Service lowered the company’s corporate family rating and issue-level ratings. Fitch Ratings downgraded the long-term issuer default rating of the company and its subsidiaries and affirmed a negative outlook.

“It’s the first step to fix a bad situation,” a trader said. “But they’ve got a lot to fix.”

The 6% notes due 2021 lost about 4 points to close at 89½ bid. The 7 1/8% notes due 2022 shed 11 points to close at 53¾ bid.

On Friday, the 7 1/8% notes gained 4¾ points.

Diebold down

North Canton, Ohio-based connected commerce solutions company Diebold’s issues fell again, market sources said. Last Thursday, the company announced that it has amended its senior secured credit agreement as part of its strategy to improve its financial position.

Also last Thursday, Standard & Poor’s lowered its issuer credit rating and affirmed a negative outlook. Moody’s Investors Service affirmed the company’s corporate family rating, probability of default rating, and issue-level ratings.

Last week the company secured a $650 million rescue loan shopped by JPMorgan Chase & Co.

The 8½% notes due 2024 lost about 1 point to close at around 71½ bid.

On Friday, the 8½% notes lost about ½ point.

Sanchez Energy falls

Houston-based independent oil and gas producer Sanchez Energy’s paper started the short week falling, traders said. The company’s recent second-quarter earnings report showed a 38 cents per share loss, missing analyst estimates of a 5 cents per share loss.

The 6 1/8% paper due 2023 lost about 1¾ points to close at 55 bid.

On Friday, the 6 1/8% paper gained about ¾ point.

Volume names trade

Luxembourg-based satellite communications company Intelsat’s notes ended mixed. Recently, subsidiary Intelsat Connect Finance SA priced a $1.25 billion offering of senior notes due 2023.

In a recent second-quarter earnings report, the company showed a 38 cents per share loss. It also reported $537.71 million in revenues.

The Intelsat (Luxembourg) SA 7¾% notes due 2021 dropped about ½ point to close at around 95¾ bid. The 8 1/8% notes due 2023 rose ¼ point to close at 86½ bid.

On Friday, the 7¾% notes lost about ¾ point and the 8 1/8% notes lost about 1 point.

Norwalk, Conn.-based wireline communications name Frontier Communications’ issues were also mixed.

After a recent negative earnings report, Standard & Poor’s downgraded its issuer credit rating, senior unsecured debt rating and affirmed a negative outlook.

The 7 5/8% notes due 2024 shaved off about ¾ point to close at around 63 bid. The 10½% notes due 2022 rose about ¼ point to close at around 87¾ bid. The 11% notes due 2025 lost ¾ point to close at 76¼ bid.

On Friday, the 7 5/8% notes were level, the 10½% notes fell about 1 point and the 11% notes lost about 1 point.

Dublin, Ohio-based alternative financial services company Community Choice’s paper declined on increased volume.

The 10¾% paper due 2019 lost about ½ point to close at around 82 bid.

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