Intelsat notes higher as hedge fund discloses stake; PG&E eyed after Q4 earnings release

By James McCandless

San Antonio, Feb. 18 – The distressed debt space focused on newsmakers in the telecom and utilities spaces on Tuesday.

Intelsat SA’s notes moved higher after a hedge fund disclosed a new stake in the company’s common stock.

Sector peer Frontier Communications Corp.’s issues picked up steam.

In the utilities space, PG&E Corp.’s paper was active but unchanged after releasing its earnings results for the fourth quarter.

Meanwhile, in oil and gas, Antero Resources Corp.’s notes varied in direction after issuing an underwhelming fourth-quarter report.

As oil futures saw a mixed day, Whiting Petroleum Corp.’s and California Resources Corp.’s issues trended downward while Southwestern Energy Co.’s paper saw a bump.

Elsewhere, REIT Uniti Group Inc.’s notes gained, extending a positive run of trading as mediation with Windstream Holdings, Inc. continues.

Tobacco name Pyxus International, Inc.’s issues improved by the end of the afternoon.

Intelsat, Frontier higher

Intelsat’s notes moved higher throughout the Tuesday session, traders said.

Intelsat Luxembourg SA’s 8 1/8% senior notes due 2023 added ½ point to close at 42½ bid. The 9½% senior notes due 2023 gained 2 points to close at 63½ bid.

The Luxembourg-based satellite operator’s structure was sent higher after hedge fund Appaloosa Management disclosed that it had purchased a 2.1% stake in the company through its common stock.

As the stake was disclosed, fund manager David Tepper wrote a letter to the board of directors advocating for a Chapter 11 bankruptcy filing.

Tepper wants the filing to force the Federal Communications Commission to renegotiate the terms of a scheduled C-band spectrum auction, calling the current arraignment unfair.

“It’s the usual hedge fund business of making noise so you can get paid,” a trader said.

As part of the current plan, the company would receive around $4.85 billion in revenues generated from the auction.

Norwalk, Conn.-based wireline communications name Frontier’s issues improved.

The 10½% senior notes due 2022 picked up 1¾ points to close at 48¼ bid. The 11% senior notes due 2025 rose 1¾ points to close at 49 bid.

PG&E active, flat

In the utilities space, PG&E’s paper was active but finished unchanged, market sources said.

The 6.05% paper due 2034 held level to close at 115 bid.

Early Tuesday morning, the San Francisco-based bankrupt electric utility released its fourth-quarter earnings report, yielding mixed results.

The company reported a 68 cents per share profit, falling short of analyst estimates of a 77 cents per share profit.

Revenues outpaced predictions at about $4.74 billion.

Third-party wildfire damage claims were $5 billion.

As part of the earnings report, the name said that it expects to spend $37 billion to $41 billion to protect its equipment against wildfire-related damages.

“Fire prevention has to be the top priority since that’s what put them in bankruptcy in the first place,” a trader said.

PG&E also said that it was on track to exit bankruptcy by June 30, the deadline to participate in a state-sanctioned fund that would assist utilities names with wildfire costs.

While the company has the backing of a majority of creditors for its restructuring plan, it awaits the approval of California governor Gavin Newsom.

Antero varies

Meanwhile, in oil and gas, Antero Resources’ notes varied, traders said.

The 5 1/8% senior notes due 2022 improved by 2½ points to close at 77 bid. The 5 5/8% senior notes due 2023 shed 1¼ points to close at 63½ bid.

The Denver-based independent oil and gas producer showed an underwhelming fourth-quarter report on Monday.

The company reported a loss of 2 cents per share, better than the 11 cents per share loss that analysts were expecting.

Revenues missed the mark at $952.7 million.

Oil production in Q4 was pegged at 809,000 barrels, representing a 28% reduction from this period last year.

Last week, Fitch Ratings issued a ratings downgrade due to a large maturity wall the company will face in the short term.

Oil mixed

A mixed day for oil futures resulted in a disparate day for distressed energy tranches, market sources said.

West Texas Intermediate crude oil futures for March delivery went unchanged at $52.05 per barrel.

North Sea Brent crude oil futures for April delivery ended at $57.75 per barrel after a 43 cent rise.

Whiting Petroleum, another Denver-based producer, saw its issues lose ground.

The 6¼% senior notes due 2023 shaved off ½ point to close at 59 bid. The 6 5/8% senior notes due 2026 lost ½ point to close at 49 bid.

Los Angeles-based peer California Resources’ paper also trended downward.

The 6% senior paper due 2024 closed level at 25 bid. The 8% senior secured notes due 2022 dropped 3½ points to close at 27½ bid.

Spring, Tex.-based producer Southwestern Energy’s notes saw a bump.

The 6.2% senior notes due 2025 added 1 point to close at 82 bid. The 7½% senior notes due 2026 tacked on ¾ point to close at 82½ bid.

Uniti gains

Telecom-focused property name Uniti’s issues gained, traders said.

The 8¼% senior notes due 2023 added ½ point to close at 97 bid. The 7 1/8% senior notes due 2024 inched up ¼ point to close at 93½ bid.

Last week, the Little Rock, Ark.-based real estate investment trust’s issues started a positive run after major customer Windstream said that mediation between the two entities was ongoing.

Working to resolve disputes such as server rents, Windstream would have Uniti fund up to $1.75 billion of growth capital improvements through December 2029, including $125 million in year one, $225 million per year in years two through five, $175 million per year in years six and seven and $125 million per year in years eight through 10.

Pyxus up

Tobacco name Pyxus’ paper improved by the end of the afternoon, market sources said.

The 9 7/8% notes due 2021 jumped up 4 points to close at 50½ bid.

The Morrisville, N.C.-based tobacco products producer’s structure has been sent further into distressed territory after a Feb. 10 third-quarter earnings filing showed a $2.40 per share loss.

Revenue came in at $363.3 million, a 30.7% reduction from that period last year.

The company laid the blame for the poor showing partly on global trade conditions.

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