Intelsat debt, shares edge higher on 1Q results, new bond guarantee

Intelsat debt and shares advanced today after the satellite giant reported better-than-expected first-quarter results and reaffirmed its 2016 sales and earnings outlook based on the ongoing demand for broadband data, a heavy backlog of contracts, the successful launch of a new satellite last month, and preparation for the launch of more of its next generation fleet.

Most notably, however, investors heard that that a first-lien guarantee is now in place on a previously non-guaranteed series of Intelsat Jackson 6.625% senior notes due 2022, and that CC/Caa3 paper surged six points, to 64/65, according to sources.

Other bonds at various spots in the multi-tiered issuer were mixed. The previously guaranteed Intelsat Jackson 5.5% senior notes due 2023, which are notched higher, at CCC/Caa2, slipped two points, with trades reported on either side of 63, while the same entity’s first-lien 8% notes due 2024 dipped three quarters of a point, to 103.25/103.75, according to sources and trade data.

Meanwhile, at parent Intelsat Luxembourg 8.125% notes due 2023, which are a deeper step lower, at CC/Ca, the paper advanced two points, to 28.5/29.5, according to sources. And other “Jackson” bonds were steady, like the 7.5% notes due 2021, which held 69.5/70.5, the sources added.

Over on the NYSE, the company’s shares, which trade under the symbol “I,” increased roughly 6.5% this morning, to $3.93.

In the loan market, the Intelsat’s B-2 term loan due 2019 (L+275, 1% floor) was marked 94.125/94.625 on the results, up from either side of 94 prior, albeit a 95 context a week ago, according to sources.

Revenue in the quarter was $552.6 million, which was down from $602.3 million in the year-ago first quarter, but roughly 2% higher than the S&P Global Market Intelligence consensus estimate for $542.8 million, filings showed. As for the EBITDA result, first-quarter earnings were $407.5 million, which was down from $460.5 million last year, but right in line with the S&P GMI consensus mean estimate for $408.4 million.

Looking ahead, the company left unchanged via reaffirmation its full-year 2016 outlook for revenue of $2.14–2.20 billion and adjusted EBITDA to $1.625–1.675 billion, filings show.

Recall that the abovementioned, first-lien 8% notes were issued at par last month, with B–/B1 ratings, via Goldman Sachs and Guggenheim to support general corporate purposes, including prepayment in full of an intercompany loan of $360 million that upstreamed a dividend to parent “Luxembourg.” That issuance halted access to the “Jackson” undrawn revolver and triggered the guarantee to the 6.625% notes, according to a company statement.

Luxembourg-based Intelsat completed its IPO in April 2013, but a BC Partners–led group named Serafina still owns a majority of the satellite concern’s common shares. Prior to today’s rally, the company’s market capitalization on the NYSE was approximately $400 million. — Matt Fuller/Kerry Kantin

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ExamWorks nets financing for buyout by Leonard Green

Bank of America Merrill Lynch, Barclays, and Deutsche Bank have committed to provide the debt financing that will back the roughly $2.2 billion buyout of NYSE-listed ExamWorks by Leonard Green & Partners. Details of the financing are not yet available.

The private equity firm would pay $35.05 per share, according to the company. The acquisition, which was announced this morning, is expected to be completed in the third quarter, subject to shareholder approval and customary closing conditions.

ExamWorks has $500 million outstanding of 5.625% notes due 2023. That deal priced in April 2015 via a Bank of America Merrill Lynch–led bookrunner group with proceeds earmarked to refinance existing debt. The B–/B3 notes changed hands last week in a 103.25-103.5 context, trade data shows.

Atlanta, Ga.–based ExamWorks is a provider of independent medical examinations, peer reviews, bill reviews, Medicare compliance, case-management, and other related services. The company recorded $140.7 million of adjusted EBITDA in 2015 on revenue of $819.6 million. Existing corporate ratings are B+/B2. — Jon Hemingway


2016 European High Yield Bond Issuance, by Country

european high yield bond issuance by country

French companies are the most active high yield issuers in Europe this year, with eight offerings totaling €1.9 billion, according to S&P Global Market Intelligence LCD.

Automotive engineering/production concern Faurecia was the largest French issuer, with a €700 million deal, most of which backed repayment of 9.375% notes (the new issue priced to yield 3.625%, making for a hefty cost reduction for the company). – Staff reports

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High Yield Bond, Leveraged Loan Issuance Take Pause After Week of Jumbo Deals

US leveraged finance issuance

U.S. leveraged finance issuance returned to earth last week as the high yield bond and leveraged loan markets began to digest jumbo deals launched to investors the previous week.

All told, there was $7.6 billion in leveraged finance issuance last week, a steep drop from the $19 billion the previous week – when Numericable bolstered activity all-around – and the least since the week of March 11, according to S&P Global Market Intelligence LCD.

Year to date, U.S. high yield bond issuance totals $51.6 billion, down roughly 55% from this point last year. Leveraged loan issuance totals $104.8 billion so far in 2016, down 9% from the same period in 2015.

While the volume numbers are unimpressive for last week – $4.6 billion in high yield and $3 billion in leveraged loan issuance – investor tone is improving across the markets. The best example of this might be activity on loans already launched, and still in the syndications process.

“In the new-issue market, the strength is on display, with arrangers flexing down 13 deals over the past two weeks, while flexing higher only three,” writes LCD’s Kerry Kantin. “The market hasn’t seen this many deals flex lower since the beginning of August.”

In the loan market, a ‘flex’ is when pricing on a deal is lowered (favoring issuers) or increased (favoring investors), depending on investor demand (there’s more info on price flexes here).

Similarly, new issuance in the high yield bond market was limited last week, though investor sentiment has improved and bids for paper in the bond secondary increased, highlighting better appetite in market, writes LCD’s Matthew Fuller.

Investors remained largely on the sidelines regarding loan and high yield funds last week. U.S. loan funds saw a small, $73 million withdrawal – the third straight for the asset class – while high yield funds saw a similarly unspectacular $84 million inflow.

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US Leveraged Finance Issuance Tops $20B as Numericable Bolsters High Yield, Leveraged Loan Marts

U.S. leveraged finance issuance totaled a hefty $20 billion last week thanks to the largest single high yield bond tranche ever and a host of new credits in an improving leveraged loan market.

US leveraged finance volume

The weekly total is the most for the combined loan/bond markets since the $31.6 billion during the first week of November, according to S&P Global Market Intelligence LCD.

Numericable was the big news of the week as the French cable concern dramatically upsized its planned $2.25 billion bond offering, backing a refinancing, to $5.2 billion – the largest in-market increase for a single tranche ever – amid investor demand.

“The stunning upsize surpassed the prior record holder of $2.65 billion, to $3.4 billion, on the 7% notes due 2023 backing First Data last fall,” writes Matthew Fuller, who covers the high yield market for LCD.

With the help of Numericable, U.S. high yield bond issuance totaled $10.9 billion last week, the most in five months, says Fuller. There were other billion dollar-plus deals, as well: one for Charter Communications and one backing MGM Growth Properties.

The increased activity comes as investors return to high yield funds and ETFs, which saw $1.2 billion in cash last week, the 7th week of net inflows out of the last eight, according to Lipper.

With last week’s deals, U.S. high yield issuance year-to-date totals $47 billion. While that’s down some 55% from the same period last year, the 2016 market continues to gain ground on the 2015 pace (the YOY difference was roughly 75% a few weeks ago).

The U.S. leveraged loan market was likewise busy last week, posting $9.1 billion in issuance. Numericable was a factor here as well, contributing the week’s largest credit, a $2.6 billion deal that is part of the company’s refinancing package. But Numericable did not have the loan market to itself.

“With technicals receiving a quarter-end booster shot, investors filled a procession of deals for well-rated and seasoned issuers this week, writes LCD’s Chris Donnelly, in his weekly market wrap. “For well-regarded issuers, investors again appear to be throwing in commitments quickly, driving accelerated timing.”

The $9 billion this week brings year-to-date U.S. leveraged loan issuance to $102 billion. That’s down roughly 7% from the same period last year. – Tim Cross

This story first appeared on, LCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

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With Risk-On in March, US Leveraged Loan Returns Trail High Yield, Equities, Despite Strong Month

asset class returns

Even though it just posted its best month since 2011, U.S. leveraged loan returns were in the middle of the pack in March, compared to other asset classes tracked by LCD, showing just how much investor appetite has changed of late.

With investors toggling to risk-on in March and the 10-year Treasury yield climbing four basis points, to 1.78%, loans gained a hefty 2.76% during the month, lagging equities and high yield, while outpacing investment-grade bonds and 10-year Treasuries.

The turnaround brings year-to-date loan returns to 1.55%. That’s impressive, considering the asset class returned -1.18% during the first two months of the year. – Staff Reports

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S&P: 5 More Corporate Defaults During Week, Bringing YTD Tally to 36

global defaultsThree U.S. corporate debt issuers and two from emerging markets defaulted this week, bringing the total so far in 2016 to 36, compared to 25 at this point last year, according to S&P Global Market Intelligence.

The recent activity keeps the default pace through March 30 as high as it’s been since 2009, when there were more than 50 defaults.

New to the default rolls this week:

  • Foresight Energy
  • Southcross Holdings
  • Nuverra Environment Solutions
  • Mongolian Mining Corp.
  • PDG Realty S.A. Empreendimentos E Participacoes


Foresight, Southcross – both energy concerns – and Nuverra are U.S. entities. Overall, U.S. issuers comprise 30 of the 36 global corporate defaults. – Tim Cross

The full analysis is available to S&P Global Credit Portal subscribers here. It includes downloadable xls files detailing the Global Corporate Default Summary, a full list of global corporate defaults year-to-date, as well as data points backing up the above chart.


S&P: ECB Stimulus to Boost European High Yield Bond Issuance in 2016

The European Central Bank’s March announcement of a new Corporate Securities Purchase Programme (CSPP) — expected to take effect in June — will be a game changer for corporate bond market issuance in Europe over the next few months, including for private equity-owned firms and leveraged corporates, according to S&P.

european leveraged finance volume

In its quarterly leveraged finance report, titled The ECB’s Corporate Buying Program Will Boost European High Yield Bond Issuance In First-Half 2016, S&P says that before the announcement, debt capital markets activity in Europe had been moribund in 2016, and had completely dried up for speculative-grade borrowers.

Inflows into high-yield funds had already begun to improve in early March, and secondary pricing fell to a point where investors started to step back in. These factors helped some well-known and highly rated names to start wading back into primary high-yield, but the ECB’s actions are likely to give the market a real boost, adds the agency.

S&P expects the anticipation of the ECB’s program launch in June will have a beneficial impact on new bond issuance, as spreads will tighten across the credit curve. This will likely lead to an increase in refinancing and recapitalization activity, as well as greater debt-funded merger and acquisition financing for corporates and private equity, it adds.

The risk from a credit perspective is that this scenario could lead to more shareholder-friendly activities — something that S&P says it will continue to monitor closely and flag to the market.

The report, which was published today on RatingsDirect, also discusses how the leveraged loan market stayed open throughout the months that were difficult for public bond issuance. Most of the deal flow came from LBOs and particularly smaller transactions, according to S&P. The rating agency also notes that borrowers active in the market used deal structures that show a reversion to the typical pre-crisis structure for leveraged buyouts, of senior secured loan lending with an accompanying revolving credit facility.

S&P anticipates that the current public debt market conditions will remain volatile throughout the year, leading to stops and starts in deal flow volume as borrowers take advantage of windows of opportunity to issue. Markets will remain vulnerable to disruption from overall volatility, including from idiosyncratic political risk, such as the U.K. referendum on whether to leave the EU, and the U.S. elections, the agency adds. — Staff reports

The report is available to subscribers of RatingsDirect at and at If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail


Leveraged Loan Issuance Soars (Thanks to Western Digital); Bright Spots for High Yield

The U.S. leveraged finance market rebounded smartly last week, posting $15.2 billion in combined leveraged loan and high yield bond issuance, according to S&P Global Market Intelligence LCD.

US leveraged finance issuance

The bulk of the activity was courtesy Western Digital, which brought to market nearly $9 billion in loans backing the company’s acquisition of SanDisk.  All in, the leveraged loan market saw $12.7 billion in much-needed volume after being all but shut out of the new issue market last week. Year to date, U.S. issuance totals $76.7 billion. That’s roughly unchanged from 2015, though the number is somewhat skewed by large deals, such as Western Digital and the $10 billion credit from Dell earlier in the year.

The U.S. high yield bond market saw $2.6 billion in new issues last week, bringing the YTD total to $23.5 billion. Despite a relative uptick in issuance and improvement in tone over the past weeks, that number is down more than 70% from the same period in 2015.

While the leveraged loan market has limped along in 2016, bright spots are emerging.

“The few transactions currently in market offered further evidence that new-issue sentiment has improved from a month ago,” says LCD’s Chris Donnelly, in his weekly market wrap-up. “Transactions were completed convincingly, with a few issuers even winning tighter terms. More importantly, there’s a sense that recent deals are of high quality and are unlikely to end up in a downward cycle of price discovery.”

Indeed, after months of withdrawals, investors are returning to U.S. loan funds, with a net $176 million flowing into the asset class last week, following a smaller inflow the previous week, according to Lipper. These deposits come after a brutal 32 consecutive weeks of outflows.

Likewise, the U.S. junk bond market is showing more life.

“The primary high-yield marketplace is steadily emerging from the stall-out of the late-February rebound rally,” says LCD’s Matt Fuller.

And investors have been returning in a big way, pouring $1.7 billion into U.S. high yield funds and ETFs last week, and $11.2 billion over the past month, says Lipper. – Tim Cross

This info first appeared on, LCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

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Leveraged Finance Fights Melanoma benefit planned for May 24

The fifth annual Leveraged Finance Fights Melanoma benefit and cocktail party is planned for May 24 at the Summer Garden and Sea Grill at Rockefeller Center. Funds raised at the event will support the Melanoma Research Alliance (MRA), the world’s largest private funder of melanoma research, which was founded in 2007 by Debra and Leon Black under the auspices of the Milken Institute.

Since this event was launched in 2012, the leveraged finance community has come together and generously supported over $5 million of cutting-edge cancer research. These funded studies have accelerated advances in immunotherapy treatments that have led to breakthroughs like anti-PD-1 agents which are being used to treat melanoma, were recently approved to treat lung cancer, and are now being tested in other tumors including bladder, blood, and kidney cancers.

The event co-hosts are Brendan Dillon from UBS; Lee Grinberg from Elliott Management; George Mueller from KKR; Jeff Rowbottom from PSP Investments; Cade Thompson from KKR; and Trevor Watt from Hellman & Friedman. Attendees include the biggest names in leveraged finance, from all of the top banks, many investment houses, several law firms, select issuers, and some private equity sponsors. As with the prior events, LCD is a proud sponsor.

Due to ongoing operational support from its founders, 100% of donations to MRA go directly to support research programs working toward a cure for melanoma, the deadliest type of skin cancer. Since MRA began its work, 11 new treatments have been approved by the FDA.

Funds raised from prior year events have supported six MRA research awards at institutions spanning the U.S. These projects focus on targeted and immunotherapy treatments, which boost the immune system to fight off cancer more effectively. The studies address critical research questions to advance the development of new therapies for melanoma patients and inform progress against cancer as a whole.

“We’re making tremendous breakthroughs in understanding and treating melanoma, including several new therapies that could be game-changers for the entire field of oncology,” said Jeff Rowbottom, LFFM co-host and MRA board member. “The Leveraged Finance Fights Melanoma events have supported important research that is enabling innovations in the way we treat cancer.”

The objectives for the 2016 LFFM event are to increase awareness, to raise funds to further advance research, and to save lives. Melanoma awareness and early detection are vital when it comes to combating the disease; if melanoma is detected early—before it has spread beyond the skin—it is almost always treatable. Past events have led to many members of the leveraged finance community seeing dermatologists for skin checks and even to the discovery and treatment of several early stage melanomas.

Tickets are $300. For further information about the event and to purchase tickets, please Those seeking information about the event and sponsorship opportunities can contact Rachel Gazzerro of MRA at (202) 336-8947 or — Staff reports