American Airlines notes mixed on medical news; Revlon eyed after tender extension

By James McCandless

San Antonio, Aug. 24 – The distressed debt space saw travel and retail names take up much of the attention of market participants on Monday.

American Airlines Group Inc.’s notes varied in direction as the market responded positively to news related to a potential coronavirus treatment.

Sector peer United Airlines Holdings, Inc.’s issues picked up steam.

Meanwhile, in retail, Revlon, Inc.’s paper diverged after extending the early deadline for an exchange offer.

Department store name L Brands, Inc.’s notes were lifted.

In the energy space, Occidental Petroleum Corp.’s issues improved after amending and extending its own tender offer.

While futures spent the day rising, Whiting Petroleum Corp.’s paper followed while Valaris plc’s and Antero Resources Corp.’s notes were under water.

Elsewhere, property owner Washington Prime Group Inc.’s issues were seen gaining despite a ratings cut.

Airlines in focus

American Airlines’ notes varied in direction to lead off the week, traders said.

The 11¾% senior notes due 2025 added ½ point to close at 95¼ bid. The 5% senior notes due 2022 dipped 1 point to close at 62½ bid.

The Fort Worth-based air carrier’s structure, along with much of the travel sector, saw positivity as the market expressed optimism over news of a potential coronavirus treatment.

Over the weekend, the Food and Drug Administration announced that it had granted an emergency use authorization for convalescent plasma as a treatment for Covid-19.

The FDA had said that 70,000 patients have been treated this way and that the potential benefits outweigh the potential risks.

“I don’t know how much this will matter in the long term,” a trader said. “I think demand is going to be weak for at least another six months.

Last week, the company announced that it would cancel flights to 15 U.S. airports in October, effecting more than 700 flights.

The airline industry is waiting for the federal government to approve a second aid package as demand remains weak.

Chicago-based sector peer United Airlines’ issues picked up steam

The 5% senior notes due 2025 grabbed ½ point to close at 87¾ bid. The 4¼% senior notes due 2022 rose 1¼ points to close at 92¾ bid.

Revlon diverges

Meanwhile, in retail, Revlon’s paper diverged, market sources said.

The 5¾% senior notes due 2021 declined by 1¾ points to close at 20 bid. The 6¼% senior notes due 2024 tacked on ¾ point to close at 17½ bid.

On Monday morning, the New York-based cosmetics maker announced that the early tender deadline and the expiration time for Revlon Consumer Products Corp.’s private exchange offer and consent solicitation for its 2021 notes have been further extended to 11:59 p.m. ET on Sept. 11, Prospect News reported.

The company is exchanging the 2021 notes for 5¾% senior notes due 2024.

As of Aug. 21, about $20,326,000 aggregate principal amount of notes have been tendered for exchange.

Columbus, Ohio-based department store name L Brands’ notes were lifted.

The 6¾% senior notes due 2036 ticked up 1¾ points to close at 101½ bid. The 5¼% senior notes due 2028 shot up 2½ points to close at 96½ bid.

Occidental improves

In the energy space, Occidental Petroleum’s issues improved, traders said.

The 2.9% senior notes due 2024 pushed up 1¾ points to close at 91½ bid. The 2.7% senior notes due 2022 gained ¼ point to close at 98¼ bid.

During Monday’s activity, the Houston-based independent oil and gas producer amended its tender offer for up to $3 billion of eight series of notes and extended the deadlines for two series of notes, Prospect News reported.

The company is modifying the priority orders for the floating-rate August 2022 notes and 3 1/8% 2022 notes.

Energy names down

While oil futures spent the day rising, distressed energy names trended downward, market sources said.

West Texas Intermediate crude oil futures for October delivery garnered 28 cents to settle at $42.62 per barrel.

North Sea Brent crude oil futures for October delivery capped the day at $45.13 per barrel after a 78 cent jump.

Denver-based producer Whiting Petroleum’s paper followed futures upward.

The 6¼% senior notes due 2023 gained 1½ points to close at 21½ bid. The 6 5/8% senior paper due 2026 also rose 1½ points to close at 21½ bid.

Antero Resources, another Denver-based E&P, saw its notes under water.

The 5 1/8% senior notes due 2022 shaved off ½ point to close at 83½ bid. The 5% senior notes due 2025 declined ½ point to close at 68½ bid.

London-based contract driller Valaris’ issues slipped.

The 5.2% senior notes due 2025 fell 3 points to close at 6 bid. The 7¾% senior notes due 2026 declined by 3¼ points to close at 6¼ bid.

Washington Prime gains

Elsewhere, property owner Washington Prime’s paper gained, traders said.

The 6.45% senior notes due 2024 inched up ¼ point to close at 50¼ bid.

On Monday, the Columbus, Ohio-based real estate investment trust received a ratings cut from S&P Global Ratings.

The agency lowered the company’s issuer credit rating, issue-level ratings and preferred stock rating.

S&P said that the downgrades reflect its view that recovery prospects are lower following amendments to the company’s credit facilities.

© 2015 Prospect News.
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