CBL notes jump as restructuring deal reached; Valaris quoted up after bankruptcy filing

By James McCandless

San Antonio, Aug. 19 – The distressed debt market was awash with fresh restructuring and bankruptcy news on Wednesday.

CBL & Associates Properties, Inc.’s notes jumped higher after the company reached a restructuring agreement with lenders.

Sector peer Washington Prime Group Inc.’s issues rose.

In the oil and gas space, Valaris plc’s paper improved after the company announced that it was filing for Chapter 11 bankruptcy.

E&P Occidental Petroleum Corp.’s notes varied on news that the company sold land grant assets worth $1.33 billion in three states.

A subdued day for oil futures were met with better levels for Whiting Petroleum Corp.’s issues while Transocean Ltd.’s paper diverged.

Meanwhile, in retail, Revlon, Inc.’s notes were pushing higher as Citigroup continues its efforts to recoup money from its lenders.

Department store name L Brands, Inc.’s issues ended on mixed ground in preparation for its after-market earnings release.

Manufacturing company Bombardier Inc.’s paper moved on separate paths a day after warning of layoffs.

CBL notes rise

CBL’s notes jumped higher to finish the day, traders said.

The 5¼% senior notes due 2023 shot up 12¼ points to close at 36¼ bid. The 4.6% senior notes due 2024 grabbed 14½ points to close at 36½ bid.

About $28 million of the notes were on the tape.

On Wednesday morning, the Chattanooga, Tenn.-based real estate investment trust announced that it had entered into a restructuring agreement with noteholders representing more than 57% of the operating partnership’s 2023 notes, 2024 notes and the 5.95% senior unsecured notes due 2026, Prospect News reported.

The plan eliminates about $1.4 billion of unsecured notes in exchange for the issuance of $500 million of new senior secured notes due June 2028, plus about $50 million of cash and 90% of the new common equity for unsecured holders.

Talks with its senior secured lenders are ongoing.

The company says that it expects to file for Chapter 11 bankruptcy no later than Oct. 1.

“This has been expected for months since they had to close all of their malls,” a trader said. “Their rent collection rates have been terrible.”

Columbus, Ohio-based sector peer Washington Prime’s issues also rose.

The 6.45% senior notes due 2024 tacked on 2¼ points to close at 45¼ bid.

Valaris up

In the oil and gas space, Valaris’ paper marked the day with an improvement, market sources said.

The 7¾% senior notes due 2026 gained ¾ point to close at 5¾ bid.

In the middle of the Wednesday session, the London-based contract driller made a pre-packaged Chapter 11 bankruptcy filing under terms of a restructuring support agreement and backstop commitment agreement reached with about 50% of its noteholders, Prospect News reported.

The new agreements include full equitization of the company’s pre-bankruptcy revolving credit facility and unsecured notes, and a fully backstopped rights offering to noteholders for $500 million of new secured notes.

As part of its restructuring, the company has received a commitment for $500 million in debtor-in-possession financing.

The company has about $7 billion in debt.

Occidental varies

E&P Occidental Petroleum’s notes varied in direction, traders said.

The 2.9% senior notes due 2024 held level at 90½ bid. The 3½% senior notes due 2025 rose ½ point to close at 90 bid.

The Houston-based independent oil and gas producer announced during the day that it will sell $1.33 billion in land grant assets in Wyoming, Colorado and Utah.

The sale of the assets to Orion Mine Finance is expected to close in the fourth quarter.

The company hopes to receive about $2 billion in proceeds from asset sales this year as part of its overall debt reduction measures.

Oil little moved

A subdued day for oil futures was met with a positive trend for distressed energy tranches, market sources said.

West Texas Intermediate crude oil futures for September delivery moved up 4 cents to settle at $42.93 per barrel.

North Sea Brent crude oil futures for October delivery finished at $45.37 per barrel after drifting 9 cents.

Denver-based producer Whiting Petroleum’s issues moved to better levels.

The 6¼% senior notes due 2023 picked up ¾ point to close at 20¼ bid. The 6 5/8% senior notes due 2026 improved by ½ point to close at 19½ bid.

Steinhausen, Switzerland-based driller Transocean’s paper diverged.

The 7½% senior notes due 2031 pushed up 1¾ points to close at 25¾ bid. The 6½% senior paper due 2020 fell 1½ points to close at 95½ bid.

Revlon higher

Meanwhile, in retail, Revlon’s notes were pushing higher, traders said.

The 5¾% senior notes due 2021 moved up 1½ points to close at 23 bid. The 6¼% senior notes due 2024 jumped up 4¼ points to close at 17 bid.

More lenders of the New York-based cosmetics producer were hit with court orders that freeze hundreds of millions of dollars that Citibank mistakenly distributed.

A judge ordered $127.3 million and $109.7 million frozen that were given to HPS Investment Partners LLC and Symphony Asset Management LLC, respectively.

Late Tuesday, $175 million sent to Brigade Capital Management was also frozen.

Citibank called the $900 million in payouts a clerical error.

L Brands mixed

Department store name L Brands’ issues ended with mixed results, market sources said.

The 6¾% senior notes due 2036 tacked on 1¼ points to close at 97½ bid. The 5¼% senior notes due 2028 gave back 1¼ points to close at 92½ bid.

The Columbus, Ohio-based retail name’s structure saw more attention in anticipation of its after-market second-quarter earnings release.

The company reported per share profit of 25 cents, higher than the expected 34 cents per share loss that analysts expected.

Net sales were reported at $2.9 billion.

The name’s Victoria’s Secret’s division showed a 39% drop in sales.

Bombardier eyed

Manufacturer Bombardier’s paper moved on separate paths, traders said.

The 6% senior notes due 2022 shaved off ¼ point to close at 81¾ bid. The 8¾% senior notes due 2021 closed level at 91¾ bid.

The Montreal-based air and rail builder announced on Tuesday that 95 employees in its Northern Ireland facility are at risk for layoffs.

As it works to offset the impact of the pandemic on its sales, the company has undertaken cost-cutting measures.

Bombardier’s recent second-quarter results have cast a shadow on it negotiations to sell its rail segment.

© 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.