Pyxus notes decline after reporting Q3 loss; WeWork gains as profitability promised

By James McCandless

San Antonio, Feb. 11 – Tuesday’s distressed debt session ended with a focus on the newsmakers of the day with the telecom space remaining active.

Pyxus International, Inc.’s notes fell after the company showed a loss in its third-quarter earnings results.

Meanwhile, real estate name WeWork Cos. Inc.’s issues saw gains as its executives promise profitability by 2022.

Connected commerce name Diebold Nixdorf, Inc.’s paper declined after missing targets for fourth-quarter earnings.

Elsewhere, in oil and gas, Antero Resources Corp.’s notes were under pressure after receiving a ratings downgrade.

A modest recovery for crude futures sparked rises in Whiting Petroleum Corp.’s and Southwestern Energy Co.’s issues while California Resources Corp.’s paper diverged.

In the telecom space, Intelsat SA’s notes shifted upward in the aftermath of reaching a deal on C-band auction revenue with regulators.

Sector peer Frontier Communications Corp.’s issues varied in direction.

Pyxus falls

Pyxus International’s notes were falling on Tuesday, traders said.

The 9 7/8% notes due 2021 declined by 2¾ points to close at 54½ bid. The 8½% notes due 2021 shed 2¾ points to close at 97 bid.

After the close on Monday, the Morrisville, N.C.-based tobacco products name released its earnings results for the third quarter.

The company reported a loss of $2.40 per share, sizably worse than the 56 cents per share profit from this time last year.

A dip in sales led to a 30.7% drop in revenue at $363.3 million.

Pyxus saw a reduction in sales and partly blamed trade conditions for its underperformance.

“They’re betting big on CBD products,” a trader said. “The results have been a mixed bag.”

WeWork gains

Meanwhile, real estate name WeWork’s issues saw gains, market sources said.

The 7 78% senior notes due 2025 jumped up 4¼ points to close at 86½ bid.

On Monday, chairman Marcelo Claure said in an interview on CNBC that he plans for the New York-based coworking startup to become free cash flow positive by 2022, with an added target of $1 billion in free cash flow by 2024.

In the last few weeks, the company has experienced a leadership shakeup with the hiring of real estate executive Sandeep Mathrani as its new chief executive officer and the departure of three members of the board of directors.

In their place, an executive at large investor SoftBank was appointed.

SoftBank recently injected billions into the company as part of a financial rescue package after a mishandled valuation indefinitely delayed an IPO and resulted in the resignation of WeWork’s CEO.

“It will slowly become more attractive if they act as seriously as they talk,” a trader said.

Diebold down

ATM maker Diebold’s paper declined by the end of the day, traders said.

The 8½% senior notes due 2024 lost 3 points to close at 95 bid.

Early Tuesday morning, the North Canton, Ohio-based connected commerce solutions company issued a disappointing fourth-quarter earnings report.

The company showed a profit of 47 cents per share, just shy of analyst targets of a 50 cents per share profit.

Revenues also underperformed at $1.15 billion.

Diebold warned that sales would continue to decline in 2020.

Antero off

Elsewhere, in the oil and gas space, Antero Resources’ notes were under pressure, market sources said.

The 5 1/8% senior notes due 2022 shaved off ½ point to close at 84½ bid. The 5 5/8% senior notes due 2023 slipped ½ point to close at 68¼ bid.

Late Monday, the Denver-based independent oil and gas producer received a ratings downgrade from Fitch Ratings.

The agency lowered the company’s long-term issuer default rating, senior unsecured debt rating and senior secured revolver rating.

Fitch also revised its outlook to negative, citing a looming large maturity wall juxtaposed with weak natural gas prices.

Crude rises

A modest recovery for oil futures led to rises for distressed energy names, traders said.

West Texas Intermediate crude oil futures for March delivery picked up 37 cents to settle at $49.94 per barrel.

North Sea Brent crude oil futures for April delivery finished the session at $54.01 per barrel after a 74 cent gain.

Whiting Petroleum, another Denver-based producer, saw its issues climb through the session.

The 6¼% senior notes due 2023 added ¾ point to close at 69¾ bid. The 6 5/8% senior notes due 2026 tacked on 1½ points to close at 56 bid.

Spring, Tex.-based peer Southwestern Energy’s paper also followed futures.

The 7½% senior notes due 2026 shot up 2 points to close at 83 bid. The 6.2% senior paper due 2025 garnered ¾ point to close at 83 bid.

Los Angeles-based producer California Resources’ notes were flat to lower.

The 6% senior notes due 2024 held level at 26 bid. The 8% senior secured notes due 2022 dipped ½ point to close at 31¼ bid.

Intelsat up

In the telecom space, Intelsat’s issues shifted upward, market sources said.

Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 gained 1¾ points to close at 49¼ bid. The 9½% senior notes due 2023 improved by ½ point to close at 69½ bid.

In the last few trading days, the Luxembourg-based satellite operator’s structure has taken up the lion’s share of activity in the distressed space as the market sifted through its revenue deal with the Federal Communications Commission concerning a C-band spectrum auction.

As part of an agreement reached late last week, the FCC agreed to pay satellite names a collective $14.9 billion, with Intelsat slated to net around $4.85 billion.

On Monday, analysts weighed in on whether the company could stay out of bankruptcy as it contends with its $14 billion in debt.

Norwalk, Conn.-based wireline communicator Frontier’s paper varied in direction.

The 10½% notes due 2022 weakened by ½ point to close at 46¾ bid. The 11% senior paper due 2025 inched up ¼ point to close at 48 bid.

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