Transocean notes gain as purchase offer starts; United eyed as earnings anticipated

By James McCandless

San Antonio, Oct. 14 – During the Wednesday distressed session, attention shifted to the energy and travel spaces.

Transocean Ltd.’s notes were seen gaining after the company started a purchase offer for five series of tranches.

While oil futures spent the day rising, Occidental Petroleum Corp.’s and Antero Resources Corp.’s issues varied in direction while Gulfport Energy Corp.’s paper dipped.

Meanwhile, in travel, United Airlines Holdings, Inc.’s notes diverged in anticipation of the company’s Q3 earnings report.

Sector peer American Airlines Group, Inc.’s issues were under water.

Movie theater name AMC Entertainment Holdings, Inc.’s paper weakened a day after reporting a capital problem.

Operator Cinemark Holdings, Inc.’s notes also went negative.

Elsewhere, in the pharma space, Mallinckrodt plc’s issues had mixed results in the wake of the company’s bankruptcy filing.

Transocean gains

Transocean’s notes gained on Wednesday, traders said.

The 5.8% senior notes due 2022 jumped up 14¼ points to close at 50¾ bid. The 7½% senior notes due 2031 gained ¼ point to close at 13¾ bid.

As the markets opened on Wednesday, the Steinhausen, Switzerland-based contract driller announced that it is offering to purchase notes from five series, including one any-and-all offer and four capped offers with an aggregate purchase price of $200 million on the capped offer not to be exceeded, Prospect News reported.

The any-and-all offer covers the company’s 6½% senior notes due 2020 of which $190,885,000 principal amount are currently outstanding.

The capped offer pertains to $115,973,000 of 6 3/8% senior notes due 2021, $37,739,000 of 3.8% senior notes due 2022, $503,509,000 of 5 3/8% senior notes due 2023 and $542,901,000 of 7¼% senior notes due 2025.

The offer expires at 11:59 p.m. ET on Nov. 9.

Oil names drift apart

While oil futures spent the day rising, distressed energy names drifted apart, market sources said.

West Texas Intermediate crude oil futures for November delivery shot up 84 cents to settle at $41.04 per barrel.

North Sea Brent crude oil futures for December delivery finished the afternoon at $43.32 per barrel after an 87 cent gain.

Houston-based independent oil and gas producer Occidental Petroleum’s issues had partial-point movements.

The 2.9% senior notes due 2024 inched up ¼ point to close at 88¼ bid. The 2.7% senior notes due 2022 shed ¼ point to close at 96½ bid.

Denver-based producer Antero Resources’ paper tracked on separate paths.

The 5 1/8% senior paper due 2022 was lifted 3½ points to close at 89 bid. The 5 5/8% senior paper due 2023 gave up ¼ point to close at 79½ bid.

Oklahoma City-based E&P Gulfport Energy’s notes dipped.

The 6% senior notes due 2024 declined ½ point to close at 62 bid. The 6 5/8% senior notes due 2023 lost 1½ points to close at 61 bid.

United diverges, AA loses

Meanwhile, in travel, United Airlines’ issues diverged, traders said.

The 5% senior notes due 2024 tacked on 1 point to close at 90¼ bid. The 4¼% senior notes due 2022 slipped 1¼ points to close at 94¼ bid.

The Chicago-based airline’s structure continued to see heightened attention, amplified by the expected release of its third-quarter earnings report after the close on Wednesday.

“I think we are going to see what we have been seeing over the last year,” a trader said before the results were released. “There are not enough travelers, so there is not enough money coming in.”

At the end of activity, the company reported an earnings-per-share loss of $8.16, wider than what analysts expected at a $7.44 per share loss.

Revenues came in at $2.49 billion.

The industry has not only been hampered by restricted travel due to the coronavirus pandemic, but by stunted negotiations over a second round of stimulus.

Lawmakers and the Trump administration are at an impasse over the terms of the stimulus package, leading companies to enact thousands of furloughs.

Fort Worth-based carrier American Airlines’ paper was under water.

The 5% senior paper due 2022 chalked off ½ point to close at 69¾ bid. The 11¾% senior paper due 2025 fell ½ point to close at 99½ bid.

AMC, Cinemark weaker

Movie theater name AMC’s notes weakened as the day went on, market sources said.

The 10½% notes due 2025 declined ½ point to close at 65 bid.

In an interview on Tuesday, the Leawood, Kan.-based movie theater name’s chief executive officer, Adam Aron, said that the company was focused on raising capital instead of bankruptcy, despite reports indicating that the option was on the table.

Also on Tuesday, the name told the Securities and Exchange Commission that it would run out of money by the end of the year if it could not raise a “material” amount of cash.

While the company has worked to reopen the majority of its locations over the last month, an influx of coronavirus cases has stifled demand.

As part of its SEC report, AMC said that attendance is down 85% year-over-year.

Plano, Tex.-based theater chain Cinemark’s issues also were negative.

The 5 1/8% senior notes due 2022 shed ½ point to close at 88¼ bid.

Mallinckrodt mixed

Elsewhere, in the pharma space, Mallinckrodt’s paper had mixed results, traders said.

The 5¾% senior paper due 2022 moved down 2 points to close at 39 bid. The 4¾% senior paper due 2023 improved by 4½ points to close at 6 bid.

Over the last two trading days, the Staines-upon-Thames, England-based pharmaceuticals producer’s structure has trended positively in the wake of its Chapter 11 bankruptcy filing on Monday.

In filing, the company said it wanted to modify its capital structure, including restructuring some debt, and resolve several billion dollars of “otherwise unmanageable potential legal liabilities.”

After emerging from bankruptcy, the name wants its debt reduced by $1.3 billion and a resolution to any opioid-related claims.

In a proposed opioid settlement, Mallinckrodt’s claimants would receive $1.6 billion in structured payments and about 19.99% of its fully diluted outstanding shares.

© 2015 Prospect News.
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