Hexion notes mixed as interest payment looms; Weatherford issues also mixed post-earnings

By James McCandless

San Antonio, Feb. 4 – The distressed market saw mixed trading to start off the new week.

Hexion Inc.’s notes were mixed as an interest payment on its 2023 notes draws near and second-lien holders continue organizing.

In oil and gas, Weatherford International plc’s issues were also mixed a trading day after the company released Q4 earnings.

A negative day for oil futures led to mixed activity for California Resources Corp., PHI, Inc., and Sanchez Energy Corp.’s paper.

In the backdrop of two retail bankruptcies, Neiman Marcus Group, Inc.’s notes were on the rise while Revlon, Inc.’s issues ended mixed.

Utilities name PG&E Corp.’s paper continued to move lower post-bankruptcy.

Samarco Mineracao SA’s notes declined, snapping a positive streak.

Hexion mixed

Hexion’s notes were mixed on Monday, traders said.

The 6 5/8% notes due 2020 picked up 1¼ points to close at 81½ bid. The 9% notes due 2020 shed 3 points to close at 42 bid.

On Monday, the Columbus, Ohio-based chemicals maker came under more market scrutiny as an interest payment on its 2023 senior unsecured notes comes due on Feb. 15.

Second-lien holders are still in talks with the company over the $2.4 billion in bonds maturing next year, suggesting to the company that it use unencumbered real estate assets to ensure collateral.

“I think they’re going to get close on this asset sale stuff but there’s still a big gap to fill,” a trader said.

Weatherford also mixed

In the oil and gas sector, Weatherford’s issues were mixed, market sources said.

The 8¼% notes due 2023 held level at 68 bid. The 9 7/8% notes due 2024 lost ¼ point to close at 69¼ bid.

On Friday, the Baar, Switzerland-based oilfield services provider received a boost in its bonds and common stock after the release of its fourth-quarter earnings results.

Despite missing earnings and revenue targets, the market picked up a positive note from the company’s free cash flow of $105 million and EBITDA.

It reported a 14 cents per share loss against analyst predictions of a 12 cents per share loss and underperforming revenues of $1.43 billion.

Also on Friday, the company announced the completion of an exchange offer for $600 million outstanding of its 9.875% senior notes due 2025 for similarly termed notes.

Oil names mixed

A negative day for oil futures led to mixed results for distressed energy names, traders said.

Los Angeles-based independent oil and gas producer California Resources’ paper closed mixed.

The 6% notes due 2024 dropped 2 points to close at 68 bid. The 8% notes due 2022 lost ¾ point to close at 80¼ bid.

Lafayette, La.-based offshore transportation name PHI’s notes were higher.

The 5¼% notes due 2019 picked up 1¾ points to close at 73½ bid.

Houston-based sector peer Sanchez Energy’s issues declined.

The 6 1/8% notes due 2023 shaved off ½ point to close at 18½ bid.

West Texas Intermediate crude oil futures for March delivery moved lower by 70 cents to end the session at $54.56 per barrel.

North Sea Brent crude futures closed at $62.51 per barrel after losing 24 cents.

Retailers push up

In the backdrop of two retail bankruptcies from FullBeauty Brands and Charlotte Russe, Neiman Marcus’ paper rose, market sources said.

The 8% paper due 2021 gained ½ point to close at 45½ bid. The 7 1/8% paper due 2028 jumped up 2¾ points to close at 81 bid.

The Dallas-based luxury retailer is currently entangled in legal disputes with creditors over a recent private equity transfer of e-commerce segment MyTheresa.

Elsewhere, New York City-based cosmetics producer Revlon was mixed.

The 5¾% notes due 2021 added ½ point to close at 81½ bid. The 6¼% notes due 2024 fell 1½ points to close at 54 bid.

PG&E down

Meanwhile, utilities name PG&E’s issues were down, traders said.

The 6.05% notes due 2034 declined by ¼ point to close at 87 bid.

Since filing for Chapter 11 bankruptcy last week, the San Francisco-based electric utility is working to secure full DIP financing for the two-year period it expects to work through bankruptcy.

On Thursday, the company won access to $1.5 billion of a proposed $5.5 billion on an interim basis with a final hearing scheduled for Feb. 27.

Samarco lower

Samarco’s paper fell, snapping a positive streak, market sources said.

The 4 1/8% paper due 2022 shed ½ point to close at 61½ bid. The 5¾% paper due 2023 lost ¼ point to close at 64¼ bid.

The Belo Horizonte, Brazil-based mining name’s paper ended a week-long positive streak after entering free fall last Monday in reaction to headlines that a dam it co-owns in the state of Minas Gerais had collapsed, killing dozens.

Until the news broke, the company was in talks with its creditors on a restructuring deal, which has since stalled.

© 2015 Prospect News.
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