United Airlines higher on vaccine news; Hertz active in rental space

By James McCandless

San Antonio, July 15 – In the middle of the week, travel-related names caught much of the attention after positive news broke related to the coronavirus.

United Airlines Holdings, Inc.’s notes moved higher after news broke of positive developments for a potential coronavirus vaccine.

Sector peer American Airlines Group Inc.’s issues also strengthened.

Car rental name Hertz Global Holdings Inc.’s paper varied in direction, trending upward as it was swept up in the positive push.

On a day of improving oil futures, Whiting Petroleum Corp.’s and Occidental Petroleum Corp.’s notes followed while SM Energy Co.’s issues moved in different directions.

Meanwhile, housewares name Tupperware Brands Corp.’s paper jumped upward, extending a positive run into a fourth day.

Real estate startup WeWork Cos. Inc.’s notes kept up a series of gains after a positive forecast regarding its cash flow.

Elsewhere, REIT Washington Prime Group Inc.’s issues were active but unchanged as retail spaces remain closed.

United, AA higher

United Airlines’ notes were seen moving higher on Wednesday, traders said.

The 5% senior notes due 2024 improved by 2¾ points to close at 80 bid. The 4¼% senior notes due 2022 rose 3¾ points to close at 85¾ bid.

The Chicago-based air carrier, along with several other travel names, saw its structure lifted after news broke late Tuesday about positive developments in a potential coronavirus vaccine.

Biotech firm Moderna reported that its possible Covid-19 vaccine was ready to move into the final phase of testing.

Phase 3 trials are expected to begin on July 27.

Last week, United announced that it was preparing 36,000 potential furloughs for U.S. workers as demand for air travel has dropped precipitously.

Fort Worth-based sector peer American Airlines’ issues also strengthened.

The 5% senior notes due 2022 gained 3 points to close at 58½ bid. The 3¾% senior notes due 2025 tacked on 3¾ points to close at 47¾ bid.

Hertz flat, up

Car rental name Hertz’s paper varied in direction, market sources said.

The 6¼% senior paper due 2022, while pushing up to 40 bid during the day, closed level at 39 bid. The 5½% senior paper due 2024 added 1 point to close at 39½ bid.

“Everyone is hungry for good news,” a trader said. “That’s why everything is going to pop on news like this.”

In the last few months, the company has seen negative attention after filing for Chapter 11 bankruptcy and garnering attention for its now-abandoned common stock financing plan.

Following its filing, the company attempted to sell $500 million in common stock despite the high likelihood of the equity winding up worthless in the event of its exit.

The name is currently involved in a dispute with creditors over how to handle its inventory of about 400,000 cars.

Oil trends up

On a day for improving oil futures, distressed energy names trended higher, traders said.

West Texas Intermediate crude oil futures for August delivery shifted up 91 cents to finish at $41.20 per barrel.

North Sea Brent crude oil futures for September delivery closed at $43.79 per barrel after an 89-cents pickup.

Denver-based independent oil and gas producer Whiting Petroleum’s notes followed futures upward.

The 6¼% senior notes due 2023 inched up ¼ point to close at 17¾ bid. The 6 5/8% senior notes due 2026 tacked on ½ point to close at 17¼ bid.

Houston-based producer Occidental Petroleum’s issues joined the trend.

The 2.9% senior notes due 2024 moved up by 1¼ points to close at 91½ bid. The 2.7% senior notes due 2022 grabbed ¾ point to close at 95¾ bid.

SM Energy, another Denver-based peer, saw its paper diverge.

The 5% senior paper due 2024 picked up 2 points to close at 58 bid. The 6¾% senior paper due 2026 chalked off 1½ points to close at 50 bid.

Tupperware jumps

Meanwhile, housewares name Tupperware’s notes jumped upward, market sources said.

The 4¾% senior notes due 2021 leaped up 7 points to close at 78 bid.

The Orlando, Fla-based household product marketer’s structure bounced higher in the run-up to the company’s announcement that it would release its second-quarter earnings results on July 29.

In its previous earnings report, the name showed an earnings per share profit of 33 cents per share, weaker than the 56 cents per share profit that analysts had predicted.

Revenues came in under expectations at $375.9 million.

Also, Tupperware recently completed a tender offer of about $97.6 million of its $600 million of senior unsecured notes.

WeWork gains

Real estate startup WeWork’s issues saw gains, traders said.

The 7 7/8% senior notes due 2025 tacked on 2½ points to close at 57¼ bid.

On Wednesday, the New York-based coworking company’s issues saw more positivity after chairman Marcelo Claure said that the company is on track to achieve positive cash flow and profits in 2021, improving on original projections of attaining that goal by 2022.

Executives credit the name’s ongoing cost cutting measures, namely laying off about 8,000 staff and selling non-core business segments.

Wash Prime active, flat

Elsewhere, property owner Washington Prime’s paper was active but flat, market sources said.

The 6.45% senior paper due 2024 closed level at 46½ bid.

As retail locations remain largely closed due to spiking cases in the coronavirus, the Columbus, Ohio-based mall name’s paper remained under pressure.

The company’s indoor mall locations have been shuttered since March.

© 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.