Revlon notes mixed as ratings put on watch; Superior Energy drops after offer extended

By James McCandless

San Antonio, Feb. 14 – Distressed debt trading focused on the retail and energy sectors on Friday.

Revlon, Inc.’s notes varied in direction as the company’s ratings were put under review by a ratings agency.

Sector peer L Brands, Inc.’s issues also saw mixed activity.

Oilfield services name Superior Energy Services, Inc.’s paper dropped after the company extended an exchange offer for senior notes.

Once again, positivity for oil futures failed to stretch to Southwestern Energy Co.’s, Whiting Petroleum Corp.’s and Chesapeake Energy Corp.’s notes.

Meanwhile, REIT Uniti Group Inc.’s issues improved a day after Windstream Holdings, Inc. reported that their mediation is ongoing.

In the telecom space, Frontier Communications Corp.’s paper tracked lower after receiving negative attention this week.

Satellite operator Intelsat SA’s notes were under pressure.

Revlon, L Brands vary

Revlon’s notes varied in direction as the week came to a close, traders said.

The 5¾% senior notes due 2021 rose ½ point to close at 83¾ bid. The 6¼% senior notes due 2024 shaved off ¼ point to close at 40½ bid.

On Friday, S&P Global Ratings announced that it had placed the New York-based cosmetics producer’s ratings on CreditWatch.

The agency said that the step was taken to reflect the increasing uncertainty surrounding the company’s ability to refinance $500 million of senior notes that are maturing shortly.

After a string of disappointing quarters, plagued with earnings losses and lagging revenues, S&P believes that Revlon’s poor operating performance will make it difficult to refinance the debt with satisfactory terms.

Columbus, Ohio-based sector peer L Brands’ issues also saw mixed activity.

The 6¾% senior notes due 2036 jumped up 5 points to close at 102¾ bid. The 5¼% senior notes due 2028 slipped ¾ point to close at 99¼ bid.

Superior Energy drops

Energy name Superior Energy’s paper dropped, market sources said.

The 7 1/8% senior notes due 2021 shed 3½ points to close at 80½ bid. The 7¾% senior paper due 2024 lost 4½ points to close at 58 bid.

Early Friday, the Houston-based oilfield services provider announced that wholly owned subsidiary SESI, LLC further extended the expiration time of its offer to exchange $635 million of its $800 million outstanding 7 1/8% senior notes due 2021 for $635 million of new 7 1/8% senior notes due 2021, Prospect News reported.

Originally slated to conclude on Feb. 13, the offer will now expire at 5 p.m. ET on Feb. 18.

As of Feb. 13, holders had tendered $610.27 million, or 76.28%, of the notes.

Oil names negative

For the second day, positivity in oil futures failed to stretch to oil and gas tranches, traders said.

West Texas Intermediate crude oil futures for March delivery added 63 cents to cap the week at $52.05 per barrel.

North Sea Brent crude oil futures for April delivery ended Friday at $57.32 per barrel after a 98 cent gain.

Spring, Tex.-based independent oil and gas producer Southwestern Energy’s notes weakened.

The 6.2% senior notes due 2025 were docked 2¼ points to close at 81 bid. The 7½% senior notes due 2026 moved down 1¾ points to close at 81¾ bid.

Denver-based producer Whiting Petroleum’s issues followed other energy names downward.

The 6¼% senior notes due 2023 shed 1 point to close at 59½ bid. The 6 5/8% senior notes due 2026 dipped 2 points to close at 49½ bid.

Oklahoma City-based peer Chesapeake Energy’s paper trailed.

The 11½% notes due 2025 slipped 2 points to close at 79¾ bid.

Uniti improves

Meanwhile, telecom-related Uniti Group’s notes improved, market sources said.

The 8¼% senior notes due 2023 tacked on 2 points to close at 96½ bid. The 7 1/8% senior notes due 2024 added 2¾ points to close at 93¼ bid.

The Little Rock, Ark.-based real estate investment trust’s structure saw heightened attention after telecom name Windstream provided an update on the two entities’ ongoing mediation to resolve issues like server rents going forward.

The company said that while no resolutions have been reached, the talks have not been terminated.

A set of terms proposed by Windstream lay out a plan in which Uniti would fund up to $1.75 billion of growth capital improvements through December 2029, including $125 million in year one, $225 million per year in years two through five, $175 million per year in years six and seven and $125 million per year in years eight through 10.

Frontier, Intelsat lower

In the telecom space, Frontier’s issues tracked lower, traders said.

The 10½% senior notes due 2022 lost ¼ point to close at 48 bid. The 11% senior notes due 2025 fell ¾ point to close at 47¾ bid.

Throughout the week, the Norwalk, Conn.-based wireline communications company was marred by negative headlines concerning service outages in several coverage areas.

A slowness in repair times for 911 emergency calling prompted a public rebuke from Democratic senator Tammy Baldwin of Wisconsin.

The company is expected to file for bankruptcy in March.

Luxembourg-based satellite operator Intelsat’s paper was under pressure.

Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 declined by 3½ points to close at 42 bid. The 9½% senior notes due 2023 sank 6½ points to close at 61½ bid.

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