Revlon notes skyrocket after completing exchange; Tenneco dips amid new offering

By James McCandless

San Antonio, Nov. 12 – Entering the latter half of a holiday-shortened week, the distressed space saw shifts in the retail and manufacturing spaces.

Revlon, Inc.’s notes skyrocketed after announcing the final results of a subsidiary’s exchange offer.

Retailer PetSmart, Inc.’s issues were under water.

In the automotive space, Tenneco Inc.’s paper dipped as the company prepares a $500 million offering of senior secured notes.

Elsewhere, oil and gas name Oasis Petroleum Inc.’s notes fell after the company’s pre-packaged restructuring plan was approved in court.

While oil futures weakened, Occidental Petroleum Corp.’s and Antero Resources Corp.’s issues varied while Weatherford International plc’s paper gained.

Theater name AMC Entertainment Holdings, Inc.’s notes diverged in direction while Cinemark Holdings, Inc.’s issues drifted lower.

Revlon soars

Revlon’s notes skyrocketed during the session, traders said.

The 5¾% senior notes due 2021 jumped up 31 points to close at 93½ bid. The 6¼% senior notes due 2024 gained 3 points to close at 25 bid.

On Thursday morning, the New York-based cosmetics producer announced that $236.5 million of the outstanding $342,785,000 of the 2021 notes by subsidiary Revlon Consumer Products Corp. have been tendered under its offer to exchange for cash or a combination of cash and ABL FILO term loans and new BrandCo second-lien term loans, Prospect News reported.

The offer expired at 11:59 p.m. ET on Nov. 10.

With the completion of the exchange, the company is avoiding a potential Chapter 11 bankruptcy filing, which it had warned was possible.

Revlon expects to redeem the remaining $106.8 million of notes on Dec. 14 at par plus interest to but excluding the redemption date.

“The notes have been volatile because there was some real doubt about Revlon’s ability to complete the exchange,” a trader said.

After the close on Thursday, Revlon reported a Q3 loss of 58 cents per share and lagging sales of $477.1 million.

Phoenix-based pet supplies name PetSmart’s bonds were under water.

The 8 7/8% senior notes due 2025 fell 1¼ points to close at 99½ bid. The 5 7/8% senior notes due 2025 shaved off ¾ point to close at 101 bid.

Tenneco lower

In the automotive space, Tenneco’s paper declined, market sources said.

The 5% senior notes due 2026 fell 1 point to close at 83¾ bid.

During Thursday’s activity, the Lake Forest, Ill.-based auto parts assembler started plans to price a $500 million offering of senior secured notes due Jan. 15, 2029 on Friday, Prospect News reported.

The deal comes with initial price guidance in the high 8% area.

With the proceeds from the new deal, the company intends to redeem all of its outstanding secured notes due 2022.

Earlier in the month, Tenneco reported underwhelming numbers for the third quarter.

Tenneco showed a 33 cents per share profit and revenues of $4.3 billion, both falling short of expectations.

The company blamed the coronavirus pandemic for the weak numbers and said that it expected a better fourth quarter.

Oasis falls

Elsewhere, oil and gas name Oasis Petroleum’s notes fell, traders said.

The 6 7/8% senior notes due 2022 gave up ½ point to close at 26 bid. The 6 7/8% senior notes due 2023 were docked ¾ point to close at 25¼ bid.

After the close on Tuesday, the Houston-based independent oil and gas producer has announced that its pre-packaged restructuring plan was confirmed in bankruptcy court.

The company expects to complete the restructuring and emerge from Chapter 11 within 30 days.

As part of its financial restructuring plan, the company plans to reduce its total debt by $1.8 billion, representing 100% of its senior notes and senior convertible notes.

Oasis intends to have $340 million of borrowings under its credit facility upon its emergence.

The company filed for bankruptcy in September.

Oil futures weak

While oil futures weakened, distressed energy tranches saw varying movements, market sources said.

West Texas Intermediate crude oil futures for December delivery finished at $41.12 per barrel after slipping 33 cents.

North Sea Brent crude oil futures for January delivery lost 27 cents to end the day at $43.53 per barrel.

Houston-based producer Occidental Petroleum’s issues varied.

The 2.9% senior notes due 2024 tacked on ¼ point to close at 90¼ bid. The 2.7% senior notes due 2022 lost 1 point to close at 96 bid.

Denver-based E&P Antero Resources’ paper also took separate paths.

The 5 1/8% senior notes due 2022 grabbed 1 point to close at 94 bid. The 5% senior notes due 2025 tripped ½ point to close at 80½ bid.

Houston-based driller Weatherford’s notes gained ground.

The 11% senior notes due 2024 improved by ¼ point to close at 68¼ bid.

AMC active

Theater name AMC’s issues diverged in direction, traders said.

The 10½% notes due 2025 lost 2¾ points to close at 69 bid. The 10½% notes due 2026 garnered ½ point to close at 66½ bid.

After being carried higher earlier in the week by news of a potential Covid-19 vaccine, the Leawood, Kan.-based movie theater chain’s structure has backed away from some gains.

The reversal comes after initial market optimism over the vaccine gave way to the subsequent realization that a finished product is not expected for some time.

Over the past few months, the company has been reopening locations that it had closed at the beginning of the pandemic.

Consumer demand, however, has not matched those reopenings.

Plano, Tex.-based sector peer Cinemark’s paper drifted lower.

The 5 1/8% senior notes due 2022 dipped 1 point to close at 93 bid. The 4 7/8% senior notes due 2023 shed 1¾ points to close at 90½ bid.

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