Intelsat bonds jump on auction revenue agreement; CBL eyed amid delisting notice

By James McCandless

San Antonio, Feb. 6 – The distressed debt space spent the Thursday session largely focused on shifting ground in the telecom space.

Intelsat SA’s notes jumped after the Federal Communications Commission reached an agreement with satellite names on C-band spectrum auction revenue.

Elsewhere in communications, Plantronics, Inc.’s issues were under pressure in the wake of the company’s Q3 earnings report.

Retail-focused REIT CBL & Associates Properties, Inc.’s paper varied amid a delisting notice for its common stock.

Sector peer Uniti Group Inc.’s notes tracked higher a day after the company priced a new senior secured note offering.

As oil futures diverged, Superior Energy Services, Inc.’s, California Resources Corp.’s and Whiting Petroleum Corp.’s issues dipped.

In the utilities space, PG&E Corp.’s paper saw positivity as the company works to gain full approval for its restructuring plan.

Meanwhile, retailer Rite Aid Corp.’s notes were active but unchanged in the aftermath of an exchange offer.

Intelsat improves

Intelsat’s notes jumped during the Thursday session, traders said.

Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 gained 8 points to close at 48½ bid. Intelsat Jackson Holdings SA’s 5½% senior notes due 2023 improved by 8¼ points to close at 90¼ bid.

On Thursday, news broke that the Luxembourg-based satellite operator and others like it has reached an agreement with the FCC on how much revenue would be paid out from a C-band spectrum auction.

After regulators and lawmakers initially floated $5 billion to $7 billion, the FCC said it would pay satellite names as much as $14.9 billion.

A collective $9.7 billion is contingent upon the companies making a timely exit from designated airwaves, while $3.3 billion to $5.2 billion would pay for relocation costs.

“It’s better than nothing,” a trader said. “But it remains to be seen if this helps Intelsat stay afloat.”

For months, the C-Band Alliance, which includes Intelsat, had lobbied for a private auction and an increased revenue share.

In a speech on Thursday, FCC chairman Ajit Pai said that the public auction would start on Dec. 8.

Plantronics down

Elsewhere in the communications space, Plantronics’ issues were under pressure, market sources said.

The 5½% senior notes due 2023 fell ¾ point to close at 89½ bid.

This week, the Santa Cruz, Calif.-based communications solutions name’s structure has seen three straight days of negativity after releasing a lukewarm third-quarter earnings report.

On the plus side, the company reported earnings of 30 cents per share, better than the 16 cents per share that was expected by analysts.

Despite this, revenues were lagging predictions at $384.47 million.

CBL flat to lower

Property name CBL’s paper varied as it works through a delisting notice, traders said.

The 5¼% senior notes due 2023 held level at 59½ bid. The 4.6% senior notes due 2024 dropped 1½ points to close at 51 bid.

The Chattanooga, Tenn.-based retail-focused real estate investment trust announced on Thursday that it had received a delisting notice on its common stock from the New York Stock Exchange.

The company said that it was considering a reverse stock split as part of a potential plan to regain compliance.

After the Thursday close, the company released fourth-quarter earnings results.

CBL showed a 37 cents per share profit, just above the analyst consensus of 36 cents per share.

Uniti higher

Sector peer Uniti Group’s notes tracked higher, market sources said.

The 8¼% senior notes due 2023 tacked on ¼ point to close at 87½ bid. The 7 1/8% senior notes due 2024 added ¾ point to close at 85¼ bid.

As the Little Rock, Ark.-based telecom REIT brings a new issue to market, the company’s existing structure saw positivity.

After the market closed on Wednesday, the name priced a $2.25 billion issue of five-year senior secured notes at par to yield 7 7/8%, Prospect News reported.

The offering was originally talked at $1.75 billion.

Concurrently, Fitch Ratings downgraded the company’s long-term issuer default rating due to its ongoing legal conflict with major customer Windstream.

Oil futures diverge

As oil futures saw a divergence, distressed energy tranches dipped, traders said.

West Texas Intermediate crude oil futures for March delivery saw a 20 cent rise to end the day at $50.95 per barrel.

North Sea Brent crude oil futures for April delivery finished at $54.93 per barrel after a 35 cent loss.

Houston-based oilfield services provider Superior Energy’s issues took a drop.

The 7 1/8% senior notes due 2021 declined by 2¼ points to close at 85¼ bid. The 7¾% senior notes due 2024 shed 2¼ points to close at 62¼ bid.

Los Angeles-based independent oil and gas producer California Resources’ paper was pushed lower.

The 6% senior notes due 2024 shaved off ¾ point to close at 28¼ bid. The 8% senior secured paper due 2022 lost ½ point to close at 33¾ bid.

Denver-based producer Whiting Petroleum’s notes joined the negative trend.

The 6¼% senior notes due 2023 fell ½ point to close at 73½ bid. The 6 5/8% senior notes due 2026 dipped ¾ point to close at 59 bid.

PG&E positive

In the utilities space, PG&E’s issues saw positivity, market sources said.

The 6.05% notes due 2034 picked up ¼ point to close at 113¼ bid.

On Wednesday, the San Francisco-based bankrupt electric utility received bankruptcy court approval for entering into an amended restructuring plan with an informal committee of senior unsecured noteholders and shareholders.

The agreement settles arguments on pre-bankruptcy debt and establishes parameters for the issuance of new debt.

The plan still requires the approval of California governor Gavin Newsom.

Rite Aid active

Meanwhile, retailer Rite Aid’s paper was active but ultimately unchanged, traders said.

The 6 1/8% senior notes due 2023 finished level at 93 bid.

The Camp Hill, Pa.-based drug store name’s structure received heightened attention after announcing that it had settled a $600 million exchange offer on its outstanding $1,753,490,000 2023 notes for newly issued 7½% senior secured notes due 2025.

About 93.18% of the outstanding amount was tendered for exchange as of this week.

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