Intelsat notes higher as revenue plan detailed; Uniti active amid refinancing talks

By James McCandless

San Antonio, Feb. 7 – The distressed debt market remained fixed on developments in the telecom sector on Friday.

Intelsat SA’s notes continued to push higher as details about a Federal Communications Commission C-band spectrum auction emerged.

Sector peer Frontier Communications Corp.’s issues diverged by the close.

Meanwhile, REIT Uniti Group Inc.’s paper varied in direction amid talks of refinancing and a senior secured note pricing.

Retail REIT CBL & Associates Properties, Inc.’s notes dropped despite the company’s fourth-quarter earnings report.

Crude oil futures saw more negativity, followed by Chesapeake Energy Corp.’s, California Resources Corp.’s and Whiting Petroleum Corp.’s issues.

Elsewhere, utilities name PG&E Corp.’s paper saw gains as the company works to get government approval for its restructuring plan.

Coworking company WeWork Cos. Inc.’s notes were on the rise as changes come to its board of directors.

Intelsat up

Intelsat’s notes continued to push higher in the telecom space on Friday, traders said.

Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 gained 4½ points to close at 53 bid. The 9½% senior notes due 2023 shot up 6¼ points to close at 73¼ bid.

On Thursday, the 8 1/8% notes gained 8 points.

The Luxembourg-based satellite operator’s structure remained active as details emerged on the FCC’s plan for a C-band spectrum auction.

According to the plan, the company could receive as much as $4.85 billion for leaving the airwaves in question.

After months of uncertainty, FCC chairman Ajit Pai outlined the parameters of the auction in a speech on Thursday, committing to pay satellite names a collective $14.9 billion out of the generated revenues.

Despite the higher-than-expected payout, analysts expect the company to remain highly levered going forward.

“I think from a bondholder perspective, it’s a plus to have some clarity on the issue,” a trader said. “But it’s not some magic number that’s going to rescue them.”

The auction is slated to start on Dec. 8.

Norwalk, Conn.-based wireline communicator Frontier’s issues diverged.

The 10½% senior notes due 2022 added ¼ point to close at 47½ bid. The 11% senior notes held level at 47½ bid.

Uniti flat to lower

Meanwhile, Uniti Group’s paper varied in direction, market sources said.

The 8¼% senior notes due 2023 shaved off ½ point to close at 87 bid. The 7 1/8% senior paper due 2024 closed level at 85¼ bid.

Friday saw heightened activity in the Little Rock, Ark.-based real estate investment trust’s paper as the company looks to amend its senior secured credit facilities agreement and put a limited waiver into place in connection with its proposed offering of new notes, Prospect News reported.

The amendment would increase the interest rate on its revolving facility by 100 basis points for each applicable rate, which, as amended, will bear interest at Libor plus 475 bps to 525 bps.

Also this week, the company priced a $2.25 billion issue of five-year senior secured notes at par to yield 7 7/8% after the Wednesday close.

“There’s been some talk that the litigation with Windstream may be winding down,” a trader said. “That would make the holders very happy.”

CBL drops

Retail-focused name CBL’s notes saw a drop despite its earnings beat, traders said.

The 5¼% senior notes due 2023 dived 9 points to close at 50½ bid. The 4.6% senior notes due 2024 shed ½ point to close at 50½ bid.

After the market closed on Thursday, the Chattanooga, Tenn.-based REIT released its fourth-quarter earnings report.

The company showed a 37 cents per share profit, just edging out analyst predictions of 36 cents per share.

Revenues also surpassed estimates at $189.51 million.

During Thursday activity, the company received a delisting notice from the New York Stock Exchange.

Oil negative

Crude oil futures saw more negativity, followed by energy names, market sources said.

West Texas Intermediate crude oil futures for March delivery declined by 63 cents to settle at $50.32 per barrel.

North Sea Brent crude oil futures for April delivery ended the day at $54.47 per barrel after a 46 cent loss.

Oklahoma City-based independent oil and gas producer Chesapeake Energy’s issues slipped.

The 8% senior notes due 2025 lost 2¾ points to close at 51 bid. The 11½% notes due 2025 gave back 1 point to close at 81 bid.

Los Angeles-based producer California Resources’ paper joined the sector trend.

The 6% senior notes due 2024 moved lower by 1¼ points to close at 27 bid. The 8% senior secured paper due 2022 fell 2 points to close at 31¾ bid.

Denver-based peer Whiting Petroleum’s notes also trailed.

The 6¼% senior notes due 2023 shaved off ¼ point to close at 73¼ bid. The 6 5/8% senior notes due 2026 tapered off by 1¼ points to close at 57¾ bid.

PG&E gains

Elsewhere, PG&E’s issues sustained a positive push, traders said.

The 6.05% notes due 2034 tacked on 1¾ points to close at 115 bid.

This week, the San Francisco-based bankrupt electric utility has seen positivity over the last few trading days after receiving bankruptcy court approval to enter into a restructuring agreement with a majority of its creditors.

After progressively winning the support of its creditors, the company still needs to land the endorsement of California governor Gavin Newsom.

Newsom has threatened the company with a state takeover if the utility does not meet the state’s safety requirements.

WeWork rises

Real estate startup WeWork’s paper was on the rise, market sources said.

The 7 7/8% senior paper due 2025 garnered ½ point to close at 80 bid.

News broke this week that three members of the New York-based coworking name’s board of directors have resigned from their positions.

A new board member, an executive of major investor SoftBank, joined the board.

The company’s paper has sustained a positive streak through this week after the company announced real estate executive Sandeep Mathrani as its new chief executive officer.

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