WeWork notes higher after cash-flow forecast; Washington Prime up in REIT space

By James McCandless

San Antonio, July 14 – The Tuesday session in the distressed debt space saw a focus on names centered on real estate.

WeWork Cos. Inc.’s notes were seen moving higher after its chairman said that it would be cash flow positive by 2021.

Meanwhile, REIT Washington Prime Group Inc.’s issues were better as a resurgence in coronavirus cases put pressure on retail-related names.

Sector peer CBL & Associates Properties, Inc.’s paper dropped.

Household brand Tupperware Brands Corp.’s notes were continuing to move better after receiving a ratings upgrade Monday.

In the oil and gas space, a rise in oil futures served as the background for a climb for Hi-Crush Inc.’s issues while Occidental Petroleum Corp.’s and Whiting Petroleum Corp.’s paper varied.

Elsewhere, retailer Party City Holdco Inc.’s notes saw more improvement a day after announcing an extension of an exchange offer.

Cosmetics producer Revlon Inc.’s issues diverged in direction.

WeWork higher

WeWork’s notes were seen moving higher by the end of the afternoon, traders said.

The 7 7/8% senior notes due 2021 jumped up 6¼ points to close at 58¼ bid.

On Monday, the New York-based coworking startup’s chairman, Marcelo Claure, said that he believes that the company will achieve positive cash flow and profits in 2021, a year ahead of its original projections.

Claure credits the name’s cost-cutting initiatives, including cutting 8,000 jobs and selling off non-essential business units.

“I think they will hit those targets,” a trader said. “They’ve been serious about reducing their burn and streamlining operations.”

The mission to reduce costs and streamline its business came after September 2019, when doubts about its value forced WeWork to terminate an initial public offering and part ways with founding chief executive officer Adam Neumann.

Wash Prime better, CBL drops

Meanwhile, property owner Washington Prime’s issues were better, market sources said.

The 6.45% senior notes due 2024 rose 3½ points to close at 46½ bid.

About $11 million of the notes changed hands.

The Columbus, Ohio-based real estate investment trust’s structure has received heightened attention as spikes in coronavirus cases around the country cast doubt on the reopening prospects of retail locations.

On Monday, the notes hit a year-to-date low at 43 bid.

“It’s a mall owner so it’s trading terribly right now,” a trader said. “I think when the bonds went that low, it caught a lot of eyes.”

As cases became prevalent around the United States in March, the company shuttered all of its indoor malls.

Chattanooga, Tenn.-based sector peer CBL’s paper dropped.

The 5¼% senior paper due 2023 shaved off ½ point to close at 26 bid. The 4.6% senior paper due 2024 fell 2 points to close at 25 bid.

Tupperware up

Household brand Tupperware’s notes continued a positive streak, traders said.

The 4¾% senior notes due 2021 picked up ½ point to close at 71 bid.

The Orlando, Fla.-based housewares name’s notes have extended a run of gains into a third day after completing a tender offer.

The company tendered about $97.6 million of its $600 million of senior unsecured notes.

Following the tender, S&P Global Ratings brought up the company’s issuer rating to CCC- from SD while keeping the rest of its ratings at D.

The agency marked the outlook as developing.

Oil names mixed

In the oil and gas space, a rise in oil futures served as a background for differing energy tranches, market sources said.

West Texas Intermediate crude oil futures for August delivery tacked on 19 cents to settle at $40.29 per barrel.

North Sea Brent crude oil futures for September delivery finished at $42.90 per barrel after an 18-cent lift.

Houston-based bankrupt fracking company Hi-Crush’s issues ended the day on better ground.

The 9½% senior notes due 2026 picked up 1½ points to close at 5 bid.

Houston-based independent oil and gas producer Occidental Petroleum’s paper varied in direction.

The 2.9% senior paper due 2024 held level at 90¼ bid. The 2.7% senior paper due 2022 improved by ½ point to close at 95 bid.

Denver-based producer Whiting Petroleum’s notes also moved along separate tracks.

The 6¼% senior notes due 2023 grabbed 1 point to close at 17½ bid. The 6 5/8% senior notes due 2026 gave up 1¼ points to close at 16¾ bid.

Party City gains, Revlon differs

Elsewhere, retailer Party City’s issues saw more improvements, traders said.

The 6 5/8% senior notes due 2026 tacked on ¼ point to close at 15½ bid.

Near the end of the day on Monday, the Elmsford, N.Y.-based party supplies retailer announced the extension of an exchange offer for any and all of its 6 1/8% senior notes due 2023 and $500 million of its 2026 notes.

Current participation in the exchange offers is at 93%.

The company’s common stock regained compliance with the New York Stock Exchange’s listing standards last week.

New York-based cosmetics producer Revlon’s paper diverged in direction.

The 5¾% senior paper due 2021 dropped 4¼ points to close at 50 bid. The 6¼% senior paper due 2024 garnered 3 points to close at 23 bid.

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