Cleveland-Cliffs notes gain after earnings beat; Revlon paper up as exchange extended

By James McCandless

San Antonio, Oct. 23 – At the end of the week, manufacturing and retail names took center stage in the distressed debt market.

Cleveland-Cliffs Inc.’s notes were seen gaining after the company reported better-than-expected third-quarter earnings.

Sector peer United States Steel Corp.’s issues also improved.

Meanwhile, cosmetics producer Revlon, Inc.’s paper gained after extending the early tender deadline on an exchange offer.

Department store name Nordstrom, Inc.’s notes ended in a better position.

As oil futures spent the session declining, Occidental Petroleum Corp.’s issues followed while Gulfport Energy Corp.’s paper varied and Transocean Ltd.’s notes rose.

Elsewhere, in the airline space, American Airlines Group, Inc.’s issues slipped as United Airlines Holdings, Inc.’s paper diverged in direction.

Cleveland-Cliffs up

Cleveland-Cliffs’ notes were seen gaining at the end of the week, traders said.

The 5 7/8% senior notes due 2027 picked up 3 points to close at 97½ bid. The 8 7/8% senior notes due 2025 rose 1½ points to close at 115¾ bid.

About $19 million of the notes were on the tape.

Before the market opened on Friday, the Cleveland-based iron ore miner released its third-quarter earnings report.

The company reported earnings per share of 4 cents, better than the 18 cents per share loss that analysts had predicted.

Revenues also beat estimates at $1.65 billion.

The company attributed 73% of that revenue to an improving automotive sector.

In a statement on the results, chief executive officer Lourenco Goncalves said that Cleveland-Cliffs expects “further sequential improvement in our adjusted EBITDA performance in the fourth quarter.”

Last month, the company announced that it would buy the U.S. assets of ArcelorMittal for $1.4 billion.

Pittsburgh-based steel producer U.S. Steel’s issues also picked up steam.

The 6 7/8% senior notes due 2025 leaped up 3¾ points to close at 83¼ bid. The 6¼% senior notes due 2026 added 3¾ points to close at 79¼ bid.

Revlon, Nordstrom gain

Meanwhile, cosmetics producer Revlon’s paper gained, market sources said.

The 5¾% senior notes due 2021 tacked on 1 point to close at 27¼ bid. The 6¼% senior notes due 2024 shifted up ½ point to close at 10½ bid.

On Friday morning, the New York-based cosmetics producer again extended the early tender deadline and withdrawal deadline of the offer by direct wholly owned operating subsidiary Revlon Consumer Products Corp., Prospect News reported.

The early tender deadline and withdrawal deadline were extended to 11:59 p.m. ET on Nov. 5 from 5 p.m. ET on Oct. 23.

As of 5 p.m. ET on Oct. 22, $46,626,000, or 13.6%, of the notes had been validly tendered in the exchange offer and not withdrawn.

The exchange offer will expire at 11:59 p.m. ET on Nov. 10.

Meanwhile, Seattle-based department store name Nordstrom’s notes ended in a better position.

The 5% senior notes due 2044 garnered ¾ point to close at 76 bid.

Oil names mixed

As oil futures spent the session declining, distressed energy names were mixed, traders said.

West Texas Intermediate crude oil futures for December delivery shed 79 cents to cap the week at $39.85 per barrel.

North Sea Brent crude oil futures for December delivery ended the day at $41.77 per barrel after a 69 cent drop.

Houston-based independent oil and gas producer Occidental Petroleum’s issues moved the same way as oil futures.

The 2.7% senior notes due 2024 shed 1¼ points to close at 89¼ bid. The 2.9% senior notes due 2022 were pushed down ½ point to close at 96 bid.

Oklahoma City-based producer Gulfport Energy’s paper varied.

The 6 5/8% senior notes due 2023 slipped 1 point to close at 57½ bid. The 6% senior notes due 2024 packed on 1½ points to close at 58½ bid.

Steinhausen, Switzerland-based contract driller Transocean’s notes rose.

The 7½% senior notes due 2031 grabbed 1 point to close at 16 bid.

Airlines in focus

Elsewhere, in the travel space, American Airlines’ issues slipped lower, market sources said.

The 5% senior notes due 2022 shaved off ¾ point to close at 71¼ bid. The 11¾% senior notes due 2025 dipped ¼ point to close at 100¾ bid.

This week, the Fort Worth-based airline reported its earnings results for the third quarter.

The company reported a loss per share of $5.54 and revenues of $3.17 billion, both outpacing expectations.

Overall, the company showed a $2.4 billion loss for the quarter.

American and others in the industry continue to push for $25 billion in government assistance, which remains stuck in negotiations between Congress and the Trump administration.

Meanwhile, Chicago-based United Airlines’ paper diverged in direction.

The 5% senior notes due 2024 held level to close at 89¼ bid. The 4¼% senior paper due 2022 rose ½ point to close at 93½ bid.

© 2015 Prospect News.
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