AMC mixed; Diamond Offshore, Transocean, Nabors, Global Marine, Callon Petroleum rally

By Cristal Cody

Tupelo, Miss., Feb. 5 – Market tone stayed strong on Friday despite a disappointing January jobs report, while distressed energy paper mostly climbed on potential higher oil prices.

The Labor Department reported non-farm payroll employment was up 49,000 in January, less than half the increase forecasted.

The unemployment rate fell 0.4 percentage point to 6.3%.

For the first month of the year, notable job gains in professional and business services and public and private education were offset by losses in leisure and hospitality, retail trade, health care and in transportation and warehousing, the Labor Department said.

The iShares iBoxx High Yield Corporate Bond ETF headed out Friday up 13 cents, or 0.15%, at $87.52.

AMC Entertainment Holdings, Inc.’s bonds were “still active” but mixed in distressed secondary trading on Friday, a source said.

The company’s 12% second-lien senior secured notes due 2026 (Ca/C) improved ½ point to 65½ bid after falling 3½ points in the prior session. The bonds are yielding more than 20%.

AMC’s bonds have been volatile, trading higher in heavy supply in the prior week after the company announced additional funding before issues softened this week.

The company’s 10½ first-lien senior secured notes due 2025 (Caa2/CCC) were down about ¼ point on Friday, while the 10½% first-lien senior secured notes due 2026 (Caa2/CCC/) rose about ¼ point, the source said.

Overall distressed secondary market action has seemed quieter this week due to strong high-yield issuance and heavy fourth-quarter earnings releases, a source said.

“It’s very new issue focused,” the source noted.

Diamond Offshore active

Energy bonds were mixed but mostly stronger over the session on reports of expected higher oil prices of up to $65, a market source said.

Oil futures remained positive on Friday after starting the week mixed.

North Sea Brent crude oil futures for April deliveries increased 50 cents to settle the day at $59.34 a barrel.

West Texas intermediate crude oil for March deliveries rose 62 cents to settle at $56.70 a barrel.

Bankrupt Diamond Offshore Drilling Inc.’s distressed paper was fairly active over the session and traded up about ½ point to 2¼ points better on the short end, a source said.

The company’s 7 7/8% notes due 2025 improved nearly 1 point to 17 bid.

Diamond Offshore, which filed for Chapter 11 bankruptcy in April amid the Covid-19 economic crush, announced on Jan. 25 that it reached a restructuring agreement with more than 70% of the holders of its senior notes and revolving credit facility loans.

Chesapeake Energy Corp.’s bonds improved on Friday as the company prepares its Chapter 11 bankruptcy exit following a $1 billion two-part sale of senior notes on Tuesday.

The energy company’s 8% senior notes due 2027 traded up 3/8 point to 6½ bid by late afternoon, a source said.

Energy bonds mostly gain

Elsewhere in the oil and gas space, offshore driller Transocean Inc.’s 11½% guaranteed senior notes due 2027 (Caa3/CCC) rose 1½ points to 80 bid during the session, a source said.

Transocean’s 6.8% senior notes due 2038 (C/CCC-/) also improved 2¼ points to 40¾ bid.

Transocean Ltd. subsidiary Global Marine Inc., one of the largest distressed names, saw its 7% senior notes due 2028 (CCC-) gain 2 points on Friday to trade at 45¾ bid.

Oil and gas exploration company Moss Creek Resources Holdings Inc.’s 7½% senior notes due 2026 (Caa2/B-) posted heavy trading on Friday and over the week, sources reported.

The notes traded Friday afternoon flat to about 3/8 point better at 85 3/8 bid but up from 82¼ bid at the start of the week.

Nabors Industries Inc.’s bonds also were heavily traded over the week and on Friday, a source said.

The oil and drilling contractor’s 5¾% senior notes due 2025 (Caa2/CCC-) jumped 4 points over the day to 73¾ bid.

Meanwhile, Callon Petroleum Co.’s 6 3/8% senior notes due 2026 (Caa2/D) added 3¾ points to trade at 70 bid, according to a market source.

Also, Gran Tierra Energy Inc.’s 7¾% senior notes due 2027 (B-/CCC) rose 3 points to hit 75½ bid on Friday, a source said.

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