GTT notes improve as new term loan secured; Washington Prime down in property space

By James McCandless

San Antonio, Dec. 23 – At the week’s midpoint, the distressed debt market turned its attention to telecom and property names.

GTT Communications, Inc.’s notes were seen improving after the company secured a commitment for a new term loan.

Sector peer Frontier Communications Corp.’s issues made gains

Over in the property space, Washington Prime Group Inc.’s paper was under pressure a day after the company enacted a reverse stock split.

Mall owner CBL & Associates Properties, Inc.’s notes were similarly weaker.

Amid an improvement in oil futures, Occidental Petroleum Corp.’s, Antero Resources Corp.’s and Callon Petroleum Co.’s issues varied in direction.

As turmoil continues around the stimulus bill, American Airlines Group Inc.’s paper diverged while United Airlines Holdings, Inc.’s notes rose.

GTT, Frontier better

GTT Communications’ notes were seen improving in the middle of the week, traders said.

The 7 7/8% senior notes due 2024 jumped up 5 points to close at 40 bid.

After the close on Tuesday, the McLean, Va.-based cloud networking services provider announced that it had entered a commitment letter to provide for up to $275 million of initial and delayed-draw term loans, Prospect News reported.

The initial draw will be $100 million and a subsequent draw of $175 million may be made upon satisfaction of some conditions.

The company will also pay a cash fee to the commitment parties at closing; a cash fee to new term loan lenders upon repayment of the new term loan; and, if any loans are repaid prior to their maturity, all interest that would have accrued on those loans.

Also, the deal hinges on the closing of the company’s sale of its infrastructure division to I Squared Capital for $2.15 billion.

If the deal is canceled, the new term loan facility will mature 60 days after the sale termination unless a new infrastructure sale agreement that satisfied the majority of lenders is reached.

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

The 10½% senior notes due 2022 rose ½ point to close at 51½ bid. The 11% senior notes due 2025 garnered ¼ point to close at 52 bid.

Washington Prime lower

In the property space, Washington Prime’s paper was under pressure, market sources said.

The 6.45% senior notes due 2024 dropped 1½ points to close at 60 bid.

The Columbus, Ohio-based real estate investment trust’s structure was trending negative a day after the company’s reverse stock split took effect.

The company had previously completed the action on Dec. 18, after having previously announced the measure during its third-quarter earnings release on Nov. 5.

Every nine shares of Washington Prime’s common stock have been converted into one share.

During the third quarter, Washington Prime reported a profit of 7 cents per share and revenues of $123.68 million.

The company said that it managed to collect 87% of its rental income for the quarter.

Chattanooga, Tenn.-based mall owner CBL’s notes were similarly weaker.

The 5¼% senior notes due 2023 shaved off ¼ point to close at 37 bid. The 4.6% senior notes due 2024 chalked off 1 point to close at 37¼ bid.

Oil names vary

With improving oil futures as the backdrop, distressed energy names varied in direction, traders said.

West Texas Intermediate crude oil futures for February delivery shot up $1.10 to finish the day at $48.12 per barrel.

North Sea Brent crude oil futures for February delivery closed at $51.20 per barrel after pushing up $1.12.

Houston-based independent oil and gas producer Occidental Petroleum’s issues drifted apart.

The 2.9% senior notes due 2024 held level to close at 96 bid. The 2.7% senior notes due 2022 reached up ½ point to close at 101½ bid.

Denver-based producer Antero Resources’ paper also moved on opposing paths.

The 5 5/8% senior notes due 2023 shed ½ point to close at 97½ bid. The 5% senior paper due 2025 moved up ¼ point to close at 92 bid.

Houston-based E&P company Callon Petroleum’s notes joined the trend.

The 6 1/8% senior notes due 2024 dipped ¾ point to close at 55½ bid. The 6 3/8% senior notes due 2026 rose 1¾ points to close at 52¼ bid.

Airlines in focus

Air travel giant American Airlines’ issues diverged, market sources said.

The 5% senior notes due 2022 inched up ¼ point to close at 88¾ bid. The 11¾% senior notes due 2025 lost 1 point to close at 113½ bid.

The Fort Worth-based airline’s structure was in focus again after the latest stimulus was put into limbo by a late Tuesday announcement from president Donald Trump.

Trump said he was opposed to the package for wasteful spending, though he has not said whether he would sign the bill or not.

The bill is earmarked with $15 billion for the airline industry.

The sector has said that that money would primarily be used to call back workers furloughed in October, funding payrolls through March.

Chicago-based sector peer United Airlines’ paper rose.

The 5% senior notes due 2024 pushed up ¾ point to close at 98¾ bid. The 4¼% senior notes due 2022 added ¾ point to close at 100¾ bid.

© 2015 Prospect News.
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