Wesco soars; Exela better; energy bonds attract buyers as oil climbs; Transocean up

By Cristal Cody

Tupelo, Miss., March 30 – Wesco Aircraft Holdings Inc.’s bonds soared about 5 points to 13 points in secondary trading on Wednesday following the company’s announcement of a fresh $250 million liquidity infusion and note exchange.

Exela Technologies, Inc.’s 11½% first priority senior secured notes due 2026 (Caa3/CCC-) improved 1 point a day after the company announced it had taken out its senior debt maturities due in 2022.

Secondary action, though, has been slow this week and “a little bit on the light side,” a source said. “Energy continues to do well with the way oil’s been trading.”

Oil prices were up about $3 to $4 on Wednesday as Russia’s invasion of Ukraine continued to weigh on market tone.

West Texas Intermediate crude oil benchmark futures for May delivery settled $3.58 higher at $107.82 a barrel.

Transocean Inc.’s bonds traded about 1½ points to 1¾ points better.

Talen Energy Supply LLC’s notes were flat to about 1¼ points higher during the session.

EnLink Midstream Partners LP’s 6% perpetual preferreds (B1/B+/BB-) traded about 3 points better on the day.

Measured market volatility rose above a 20 handle before easing back by the close as stocks declined.

The Chicago Board Options Exchange’s CBOE Volatility index was up 2.28% at 19.33 at the day’s end.

The iShares iBoxx High Yield Corporate Bond ETF, which jumped $1.01 on Tuesday, finished 25 cents lower at $82.59.

“The market was off a little bit, but we had a decent rally yesterday and a little bit of follow-through today,” a trader said, mentioning an opportunity to sell at higher prices. “A lot of the more Treasury-sensitive stuff had a bit of a rally. We continue to see buyers across the board in the energy sector.”

Wesco bonds jump

Wesco’s bonds soared about 5 points to nearly 13 points in strong trading action on Wednesday, a source said.

The 13 1/8% senior notes due 2027 (Ca/CCC-) climbed 11¼ points to 41¼ bid on over $29 million of volume.

Wesco’s 8½% senior secured notes due 2024 (Caa3/CCC+) jumped nearly 13 points to 73 bid with $7.66 million of paper traded.

The company’s 9% senior secured notes due 2026 (Caa3/CCC+) went out nearly 5 points higher at 67 bid in lighter supply totaling $4.65 million.

The Fort Worth-based aerospace supplier, now doing business as Incora, 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.

Incora announced on Tuesday that it has completed a comprehensive recapitalization that included an immediate liquidity infusion of $250 million.

Incora also said participating bondholders, including Silver Point Finance, LLC, exchanged their existing secured and unsecured notes for new bonds due in 2026 and 2027, extending the maturity on over $450 million of bonds that would have been due in 2024.

Exela picks up point

Exela Technologies’ 11½% first priority senior secured notes due 2026 (Caa3/CCC-) climbed 1 point on Wednesday, going out at 53 bid, a source said.

The bonds are down about 8 points on the month.

Exela reported on Tuesday that its subsidiaries closed on a revolving loan exchange and prepayment agreement with lenders under its July 12, 2017 first-lien credit agreement.

The company said the total amount outstanding under the revolving facility was prepaid with $50 million of cash and the remainder exchanged for $50 million of its 11½% notes due 2026, leaving no further senior debt maturities due in 2022.

Exela has been active year to date, including on March 22 listing 6% convertible preferred stock on Nasdaq and in February purchasing existing Irish headquarters.

In December, the software and services company with global headquarters in Irving, Tex., exchanged the bulk of its 10% senior secured first-lien notes due 2023 (Caa3/CCC-) for the new 11½% first priority senior secured notes due 2026.

Transocean gains

Transocean’s bonds rode the rising oil prices on Wednesday to trade about 1½ points to 1¾ points higher, a market source said.

The company’s 7½% senior notes due 2026 (Ca/CCC) were up 1½ points at 86¼ bid on nearly $21 million of volume.

The Vernier, Switzerland-based offshore driller’s 6.8% senior notes due 2038 (C/CCC) traded about 1¾ points better at the 68 bid area on more than $23 million of activity on Wednesday.

Talen notes mixed

Talen’s paper was flat to better with the 6½% senior notes due 2025 (Caa2/CCC/CCC) up about 1¼ points to around 29¼ bid in strong trading action on Wednesday, a source said.

Talen’s 10½% senior notes due 2026 (Caa2/CCC/CCC) were mostly flat at 29½ bid in light action over the day.

Talen’s paper remained mostly soft on the week, with the 6½% notes down about 1¾ points and the 10¼% notes about 2¼ points lower since Friday.

The Woodlands, Tex., and Allentown, Pa.-based power company’s credit default swap spreads have been soft in March, moving out over 2,900 bps to 10,691 bps in the prior week.

EnLink higher

EnLink Midstream Partners’ 6% perpetual preferreds (B1/B+/BB-) also rode the energy wave 3 points higher on Wednesday to 72½ bid, a source said.

The issue is about 1¼ points better from Friday.

The Dallas-based natural gas processor and pipeline operator’s preferreds have traded in the 69 to 72 bid range over March.

Distressed index improves

The S&P U.S. High Yield Corporate Distressed Bond index one-day total return improved on Tuesday to minus 0.09% versus minus 0.18% on Monday.

Month-to-date total returns were minus 2.66% on Tuesday, compared to minus 2.57% at the start of the week.

Year-to-date index returns weakened to minus 5.92% in Tuesday’s session from minus 5.83% on Monday.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.