Tupperware notes trade higher on redemption plan; AMC eyed after earnings report

By James McCandless

San Antonio, Nov. 3 – Retail and entertainment sector bonds were the focus of trading in the distressed debt market on Tuesday.

Tupperware Brands Corp.’s notes were seen moving higher after announcing a plan to redeem all outstanding senior notes.

Meanwhile, theater operator AMC Entertainment Holdings, Inc.’s issues varied in direction after the release of its third-quarter earnings.

Automotive manufacturer Tenneco, Inc.’s paper was under pressure despite a positive note from an analyst.

In oil and gas, Callon Petroleum Co.’s notes improved in the run-up to the company’s announcement of a four-series swap.

As oil futures saw another day of gains, Occidental Petroleum Corp.’s, SM Energy Co. and Antero Resources Corp.’s issues followed.

Retail name PetSmart, Inc.’s paper was trailing in the wake of the company backing away from offering notes and a term loan.

Cosmetics producer Revlon, Inc.’s notes diverged.

Tupperware higher

Tupperware’s notes were seen moving higher by the close, traders said.

The 4¾% senior notes due 2021 popped up 3¼ points to close at 100½ bid.

After the close on Monday, the Orlando, Fla.-based housewares marketer announced plans to redeem all $380.2 million outstanding senior notes, Prospect News reported.

The company plans to fund the redemption and all related fees and expenses using proceeds from its term loan facilities and cash on hand.

On Monday, Tupperware said that it had entered into a commitment letter for $275 million in two term loans.

The closing of the facilities is expected in the fourth quarter of 2020.

Following the execution of the redemption, the company will not have any debt maturing until fourth-quarter 2023.

Over the last several months, Tupperware has been executing a turnaround plan to improve its sales growth.

In a press release, chief financial officer Sandra Harris said that the transactions and turnaround plan would alleviate going-concern worries.

AMC flat to higher

Meanwhile, theater operator AMC’s issues varied in direction, market sources said.

The 12% notes due 2026 garnered ¾ point to close at 5¾ bid. The 10½% notes due 2026 held level to close at 54 bid.

After the close on Monday, the Leawood, Kan.-based movie theater chain released its earnings report for the third quarter.

The company showed a loss per share of $5.70, worse than the analyst consensus of a $4.66 per share loss.

Revenues came in at $119.5 million, above estimates.

“I think people are reading into the top line and running with that, combined with how many theaters are open now,” a trader said.

On Monday, AMC filed a plan with the Securities and Exchange Commission to sell 20 million shares of its common stock over time.

The plan is expected to raise about $50 million.

Tenneco down

Auto parts maker Tenneco’s paper was under pressure, traders said.

The 5% senior notes due 2026 were docked 2 points to close at 79½ bid.

During Tuesday’s activity, the Lake Forest, Ill.-based automotive manufacturing name received an analyst upgrade for its common stock.

An analyst at Deutsche Bank raised the target price for the common stock to $11.00 to $10.00 in the aftermath of the company’s earnings report for the third quarter.

Despite the upgrade, the analyst kept the name at a “hold” rating.

On Monday morning, Tenneco reported earnings per share of 33 cents, worse than the 43 cents per share profit that analysts had expected.

Revenues came in above predictions at $4.26 billion.

Tenneco projects light growth for the fourth quarter amid consistently weak conditions in the automotive industry.

Callon notes trade up

In oil and gas, Callon Petroleum’s notes were spotted improving, market sources said.

The 6 1/8% senior notes due 2024 rose 1¾ points to close at 37½ bid. The 6 3/8% senior notes due 2026 grabbed 4½ points to close at 27½ bid.

The Houston-based independent oil and gas producer’s structure was in focus in advance of the company’s announcement that it has agreed to exchange $286 million of its existing notes from four series for up to $158.5 million of newly issued 9% second-lien senior secured notes due 2025, Prospect News reported.

The company entered into an exchange agreement on Nov. 2 with holders of its 6¼% senior notes due 2023, the 2024 notes, 8¼% senior notes due 2025 and the 2026 notes.

Under the exchange agreement, Callon will issue to the holders about 1.16 million warrants exercisable for shares of common stock.

Oil gains

As oil futures saw another day of gains, distressed energy tranches followed, traders said.

West Texas Intermediate crude oil futures for December delivery picked up 85 cents to settle at $37.66 per barrel.

North Sea Brent crude oil futures for January delivery capped the day at $39.71 per barrel after a 74 cent boost.

Houston-based producer Occidental Petroleum’s issues ended on the positive side.

The 2.9% senior notes due 2024 added 1¼ points to close at 86¼ bid. The 2.7% senior notes due 2026 moved up 2 points to close at 95 bid.

Denver-based E&P SM Energy’s paper joined the trend.

The 6 1/8% senior notes due 2022 racked up 4 points to close at 79¼ bid. The 6¾% senior paper due 2026 rose 1 point to close at 38½ bid.

Antero Resources, another Denver-based producer, saw its notes pick up steam.

The 5 1/8% senior notes due 2022 pushed up 1¼ points to close at 94¼ bid. The 5% senior notes due 2025 tacked on 1½ points to close at 78 bid.

PetSmart trails

Retail name PetSmart’s issues were seen trailing, market sources said.

The 8 7/8% senior notes due 2025 fell 1½ points to close at 99¾ bid. The 5 7/8% senior notes due 2025 shaved off ¾ point to close at 101¼ bid.

The Phoenix-based pet supplies company’s structure remains active in the wake of its walk-back of a $2.65 billion megadeal to split from e-commerce name Chewy.com.

PetSmart had expected to price an upsized $1.5 billion, from $1.2 billion, tranche of seven-year senior secured notes and a $1.15 billion tranche of eight-year unsecured notes on Friday.

PetSmart also cancelled a plan for a $2 billion six-year term loan B.

Meanwhile, New York-based cosmetics producer Revlon’s paper diverged.

The 5¾% senior notes due 2021 chalked off ½ point to close at 33¾ bid. The 6¼% senior paper due 2024 garnered 1¼ points to close at 11½ bid.

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