FirstEnergy Solutions mixed as Trump signals possible aid; Northern Oil up as company sells stock

By James McCandless

San Antonio, April 6 – The distressed debt market ended the week subdued, traders reported, as the focus remained on news-driven names.

FirstEnergy Solutions Corp. notes were mixed on Friday amid reports that president Donald Trump is considering approving an emergency aid package for at-risk power plants.

Northern Oil and Gas, Inc.’s issues climbed as the company made a new common stock offering on Friday morning.

Frontier Communications Corp. paper closed mixed after making gains over the last few days as the company begins seeking buyers for some of its assets.

Intelsat SA finished another week as another distressed telecom name leading in volume.

Community Health Systems, Inc. wrapped the week’s trading on a firm note as the company continued to try to solve its debt problem.

Talen Energy Supply LLC gained to close the week, becoming one of the most active energy names in distressed trading.

FirstEnergy mixed

FirstEnergy Solutions, a subsidiary of Akron, Ohio-based electricity producer FirstEnergy Corp., saw its notes mixed to close the week, traders said, as the possibility of federal aid to forestall power plant closures became more likely.

Reports confirmed that at an event in West Virginia on Thursday, Trump signaled his approval of the Department of Energy’s potential use of authority to keep troubled plants open by guaranteeing them profitability.

The company, along with FirstEnergy Nuclear Operating Co., filed for bankruptcy over the weekend. Their parent company then announced that the subsidiaries would be deconsolidated due to the filing.

At the time of its filing, the company said it would continue to seek help for the benefit it believes its power plants provide to the electricity supply system.

The company’s 6.05% notes due 2021 rose about 1¼ points to close at 31 bid. The 6.8% bonds due 2039 dropped about 1 point to close just below 29 bid.

Those added to gains made Thursday, the 6.05% notes rising 1 point and the 6.8% notes adding 1¾ points.

Northern Oil moves up

Minnetonka, Minn.-based independent oil and gas producer Northern Oil and Gas’s issues traded up in end-of-week trading, a market source said, after the company announced Friday morning that it would be making a public offering of 58,666,667 shares of its common stock.

The offering is expected to close on April 10.

The 8% notes due 2020 gained 1¾ points to close at 95½ bid.

Frontier mixed

Norwalk, Conn.-based wireline telecom name Frontier Communications paper, having made significant gains over the past week, closed the week mixed according to traders. Reports on Wednesday disclosed that the company has hired financial advisory firm Evercore to find buyers for certain assets in Florida, Texas, Connecticut and California.

The company has made a few moves in favor of debt repayment, including the recent decision to scrap its quarterly dividend.

After gaining a few points since Wednesday, the 7 5/8% paper due 2024 lost about 3 points to close at around 61 bid on Friday.

The 10½% paper due 2022 continued making multi-point gains, adding 1½ points to close at 88¼ bid.

But also reversing some of the multi-point gains made this week, the 11% paper due 2025 lost 1¼ points to close at 76 bid.

Volume names trade

Elsewhere in distressed telecom, Luxembourg-based satellite communications company Intelsat closed the week as another high volume favorite.

The Intelsat Jackson Holdings SA 5½% notes due 2023 lost about ¾ point to close at 82 bid. The 7¼% notes due 2020 shaved off ¼ point to close at 94¾ bid.

Franklin, Tenn.-based hospital operator Community Health Systems issues were up to end the week as the company continues to make moves towards solving its debt issues, including asset recent sales.

The 7 1/8% notes due 2020 gained about ¼ point to close above 82¼ bid. The 6 7/8% notes due 2022 added about ½ point to close at 58¼ bid.

Allentown, Pa.-based independent power producer Talen Energy saw its 6½% paper due 2025 gain 1¾ points to close at 69¾ bid after losing 2 points Thursday.

“All in all it was a pretty quiet week,” a trader said. “There is just a lot of uncertainty with these tariffs being thrown back and forth, so not many people are wanting to jump in.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.