Ensco Rowan gains after gaining consents; Hexion drops as debt approved

By James McCandless

San Antonio, June 10 – As a new week started in the distressed space, trading was focused on several news-making names.

Ensco Rowan plc’s notes were gaining as the company announced that it received consents to amend five series of Rowan notes.

Sector peer Covey Park Energy LLC’s issues moved lower after news broke of an acquisition by Comstock for $2.2 billion.

Despite lower oil futures, California Resources Corp.’s and Weatherford International plc’s paper improved.

Elsewhere, Hexion, Inc.’s existing notes fell after the company received court approval to commit to $2 billion in new debt.

In telecom, Frontier Communications Corp.’s issues were trending upward in the aftermath of new board appointments.

Intelsat SA’s paper finished mixed.

Retailers L Brands, Inc.’s and Neiman Marcus Group, Inc.’s notes were both mixed.

Ensco Rowan gains

Ensco Rowan’s notes were gaining throughout Monday, traders said.

The 5.2% notes due 2025 rose ¾ point to close at 71¼ bid. The 7¾% notes due 2026 added 1¾ points to close at 76¾ bid.

On Monday, the London-based contract driller announced that it received the consents necessary to effect the proposed amendments to the indentures of five sets of senior notes issued by its Rowan Cos., Inc. subsidiary, Prospect News reported.

The company started the solicitation so that some covenants will be amended to be conformed with the applicable covenants contained in the indentures governing the senior notes issued by Ensco Rowan.

“It takes a lot of work to bring everything under the fold,” a trader said.

After last year’s announcement of a $2.38 billion takeover in 2018, the two companies completed the merger in April.

Covey Peak lower

Meanwhile, sector peer Covey Park’s issues were pushed lower, market sources said.

The 7½% notes due 2025 dropped 8¾ points to close at 80 bid.

News broke on Monday morning that the Dallas-based independent oil and gas producer had agreed to be acquired by Comstock Resources for $2.2 billion.

According to Comstock, the move expands its position in the Haynesville Basin with an estimated net daily production of about 1.1 billion cubic feet equivalent in 2,000 net drilling locations.

Oil names rise

Although oil futures saw a loss, distressed oil names were better by the close, traders said.

Los Angeles-based producer California Resources’ paper improved.

The 8% notes due 2022 picked up ½ point to close at 72 bid.

Baar, Switzerland-based oilfield services provider Weatherford’s notes were also trending better.

The 8¼% notes due 2023 improved by ½ point to close at 51¼ bid. The 9 7/8% notes due 2024 gained 1¾ points to close at 50¾ bid.

West Texas Intermediate crude oil futures for July delivery ended the day 73 cents lower to $53.26 per barrel.

North Sea Brent crude oil futures for August delivery closed the session at $62.29 per barrel after a $1.00 drop.

Hexion falls

Elsewhere, Hexion’s issues were falling on Monday, market sources said.

The 6 5/8% notes due 2020 took off 1¾ points to close at 78¼ bid. The 9% notes due 2020 lost 1 point to close at 17½ bid.

On Friday, the Columbus, Ohio-based chemicals producer received court approval to enter into commitment and fee letters for a total of about $2 billion in new asset-based credit facility and term loan debt and senior unsecured notes, Prospect News reported.

The company said that a vote on its reorganization is in progress and it is confident that it has the support of its creditors.

The company filed for Chapter 11 bankruptcy in April.

Frontier gains, Intelsat mixed

In telecom, Frontier’s paper was on an upward trend, traders said.

The 10½% paper due 2022 added ¾ point to close at 74¼ bid. The 11% paper due 2025, while moving up to 65½ bid during the session, ended level at 65 bid.

The Norwalk, Conn.-based wireline communications name’s structure was under pressure on Friday after it announced three new appointments to its board of directors, which included people with restructuring experience.

Luxembourg-based satellite operator Intelsat’s notes were mixed.

Intelsat Jackson Holdings SA’s 5½% notes due 2023 held level at 89 bid. Intelsat (Luxembourg) SA’s 8 1/8% notes due 2023 edged up ¼ point to close at 73¼ bid.

L Brands, Neiman mixed

Retailer L Brands’ issues ended Monday mixed, market sources said.

The 6¾% notes due 2036 rose ½ point to close at 86¼ bid. The 5¼% notes due 2028 slipped 1¾ points to close at 89½ bid.

The company launched a tender offer for four series of notes and priced a new offering of senior notes.

Dallas-based luxury retailer Neiman Marcus’ paper also closed mixed.

The 8% paper due 2021 gained ½ point to close at 57½ bid. The 14% paper due 2024 was level at 91 bid.

© 2015 Prospect News.
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