Wesco bonds under pressure; Transocean, PBF soften along with oil; China Evergrande up

By Cristal Cody

Tupelo, Miss., Sept. 9 – Wesco Aircraft Holdings Inc.’s secured notes sold off further on Thursday.

The bonds declined about 1½ points, going out about 5 points down on the week.

Energy bonds mostly softened in light trading in a backdrop of weaker oil prices over the session.

Transocean Inc.’s 7¼% senior notes due 2025 (Ca/CCC+) fell 1 point in just one trade seen over the day, a source said.

PBF Holding Co. LLC’s paper was mixed but mostly gave back about ½ point to 1¼ points.

In other distressed issues, China Evergrande Group’s dollar bonds saw improvement.

The 11½% secured notes due 2023 (C/CCC-/CCC) rose 1 7/8 points during the session.

The Chinese real estate developer’s bonds have plunged about 70 points since May.

Wesco notes off

Wesco Aircraft’s notes issued via Wolverine Escrow LLC traded down about another 1½ points on Thursday after losing 1¾ points to 2 points on Wednesday and 1½ points to 2¼ points on Tuesday, sources said.

Wesco’s 8½% senior secured notes due 2024 (Caa3/CCC+) fell 1½ points to 85½ bid by late afternoon on $8.5 million of paper traded.

Wesco’s 9% senior secured notes due 2026 (Caa3/CCC+) slid to 84¾ bid by the close, down 1½ points on the day after trading 1¾ points weaker on Wednesday and off 1½ points on Tuesday. Secondary volume totaled nearly $20 million on Thursday.

The Fort Worth-based aerospace supplier reported “bad” second-quarter numbers in August, a market source said.

Wesco was acquired in 2020 by an affiliate of investment firm Platinum Equity and combined with U.K.-based aerospace and defense industry supplier Pattonair Ltd. to create Incora.

Transocean lower

Transocean’s 7¼% senior notes due 2025 (Ca/CCC+) dropped 1 point to 77½ bid in thin trading on Thursday, a source said.

The Vernier, Switzerland-based offshore driller’s notes are about ¾ point weaker from where the paper finished August.

PBF mostly weaker

PBF Holding’s paper was mixed but mostly softened about ½ point to 1¼ points during the session, a source said.

PBF’s 6% senior notes due 2028 (B3/B) declined ½ point to trade at 58½ bid.

The Parsippany, N.J.-based petroleum refiner’s notes have given back about 7 points since the end of August.

China Evergrande gains

China Evergrande Group’s 11½% secured notes due 2023 (C/CCC-/CCC) rose 1 7/8 points to 27 3/8 bid on light volume of $1 million, according to a market source.

The notes dropped nearly 2¾ points on Wednesday to 25½ bid.

China Evergrande’s 12% senior notes due 2024 (C/CCC-/CCC) were last seen trading Wednesday down 2¼ points at 25¼ bid.

The Shenzhen, China-based real estate developer’s bonds are down about 70 points since May.

Moody’s Investors Service announced on Tuesday that it downgraded China Evergrande, Hengda Real Estate Group Co. Ltd., Tianji Holding Ltd. and Scenery Journey Ltd.

Distressed returns soften

Market tone was mixed with equities lower and oil prices weaker.

West Texas Intermediate crude oil benchmark futures for October deliveries dropped $1.16 to settle the day at $68.14 a barrel.

The iShares iBoxx High Yield Corporate Bond ETF rose 8 cents to $87.96.

Distressed index returns have been mixed week to date.

The S&P U.S. High Yield Corporate Distressed Bond index saw a 0.08% total return on Tuesday but softened to minus 0.12% on Wednesday.

Month-to-date total returns declined to 0.37% on Wednesday from 0.49% on Tuesday, and year-to-date total returns softened to 27.16% from 27.31% at the start of the holiday week.

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