Revlon notes gain amid lender dispute; Antero Resources eyed as new issues price

By James McCandless

San Antonio, Aug. 18 – Retail and energy names were the focus of distressed debt trading on Tuesday.

Revlon, Inc.’s notes gained ground as a court ordered that $175 million of mistakenly disbursed money to one of its lenders be frozen.

Sector peer L Brands, Inc.’s issues varied in direction as the market anticipated the company’s second-quarter earnings release.

Meanwhile, Antero Resources Corp.’s paper diverged as it prepared to issue six-year convertible notes.

With oil futures higher, Occidental Petroleum Corp.’s, Whiting Petroleum Corp.’s and Transocean Ltd.’s notes all ended with mixed results.

Airplane and railcar manufacturer Bombardier Inc.’s issues differed as the company warned of potential layoffs in its European workforce.

Elsewhere, AMC Entertainment Holdings, Inc.’s paper rose despite market worries about theater reopenings.

Vehicle renter Hertz Global Holdings, Inc.’s notes were under pressure following an executive change.

Revlon gains

Revlon’s notes gained ground by the end of Tuesday, traders said.

The 5¾% senior notes due 2021 improved by ½ point to close at 21½ bid. The 6¼% senior notes due 2024 shot up 3¼ points to close at 12¾ bid.

Just before the close on Tuesday, news broke that a temporary court order was granted to freeze $175 million that was mistakenly distributed to one of the New York-based cosmetics producers’ lenders.

Citigroup petitioned a court to authorize the freeze as part of its effort to recoup $900 million from Brigade Capital Management that it sent to lenders in what it describes as a “clerical error.”

The bank filed the lawsuit on Monday, having recouped a partial amount of the funds.

This is the second dispute the company’s creditors have been involved with recently, with UMB Bank suing for alleged intellectual property theft.

UMB claims that Revlon improperly transferred $1.8 billion in intellectual property rights to use as collateral.

L Brands varies

Sector peer L Brands’ issues varied in direction, market sources said.

The 6¾% senior notes due 2036 drifted ½ point to close at 96¼ bid. The 5¼% senior notes due 2028 grabbed 2¾ points to close at 93¾ bid.

As the market anticipates the Columbus, Ohio-based department store chain’s second-quarter earnings, its structure saw higher levels of activity as analysts weighed in on what to expect.

Under the consensus estimates, the company is expected to lose about 43 cents per share with net sales of $2.16 billion.

Analysts are also optimistic about the results from its Bath & Body Works unit and the potential for it to be spun off.

“There was a lot of focus on this,” a trader said. “It’s a bellwether of retail right now.”

At the end of last month, the company outlined a $400 million plan to cut costs as the coronavirus pandemic continues to result in lost sales.

Antero diverges

Meanwhile, Antero Resources’ paper was seen diverging, traders said.

The 5 5/8% senior notes due 2023 rose 1 point to close at 77¾ bid. The 5% senior paper due 2025 shed 1¼ points to close at 68¾ bid.

Early Tuesday, the Denver-based independent oil and gas producer announced plans to price $250 million of six-year convertible notes after the market close, Prospect News reported.

The notes were talked at 3.75% to 4.25% and an initial conversion premium of 20% to 25%.

With the proceeds, Antero intends to repay debt under its credit facility.

The repaid amount may be reborrowed at any time, including to fund pending tender offers for senior notes.

Last week, Antero launched cash tender offers to purchase any and all of its $500,202,000 of 5 3/8% senior notes due 2021 and up to the Dutch auction cap of its $756.03 million of 5 1/8% senior notes due 2022 and its $705,641,000 of its 2023 notes.

Oil skews up

With oil futures flat to higher, distressed energy names ended with mixed results, market sources said.

West Texas Intermediate crude oil futures for September delivery went unchanged to settle back at $42.89 per barrel.

North Sea Brent crude oil futures for October delivery finished at $45.46 per barrel after a 9 cent rise.

Houston-based producer Occidental Petroleum’s notes moved on separate tracks.

The 2.9% senior notes due 2024 shaved off ¼ point to close at 90½ bid. The 2.7% senior notes due 2022 gained ¾ point to close at 97½ bid.

Denver-based peer Whiting Petroleum’s issues drifted apart.

The 6¼% senior notes due 2023 inched up ¼ point to close at 19½ bid. The 6 5/8% senior notes due 2026 were pushed down ¾ point to close at 19 bid.

Steinhausen, Switzerland-based contract driller Transocean’s paper moved similarly.

The 7½% senior paper due 2031 fell 2½ points to close at 24 bid. The 6½% senior notes due 2020 added ½ point to close at 96¾ bid.

Bombardier active

Airplane and railcar producer Bombardier’s notes were mixed in trading, traders said.

The 7½% senior notes due 2025 held level to close at 72½ bid. The 8¾% senior notes due 2021 gave up ¼ point to close at 91¾ bid.

During the Tuesday session, the Montreal-based manufacturer said that 95 core employees in a Northern Ireland plant are at risk of redundancy.

The move is part of the company’s workforce reduction measures to mitigate the impact of the coronavirus on sales and production.

Recently, the company reported underwhelming second-quarter results, which resulted in the buyer of its rail unit to say that it would take the results under consideration during sale negotiations.

AMC rises

Elsewhere, entertainment name AMC’s issues rose, market sources said.

The 12% notes due 2026 gained ½ point to close at 29¾ bid.

The gains for the Leawood, Kan.-based movie theater chain’s issues came despite persistent market worries about coronavirus cases.

Last week, the company announced that it would reopen locations at theater prices from 100 years ago as it plans a revamp of its business.

In July, the company raised $300 million to tide itself over after government mandates shuttered its locations.

Hertz edges lower

Vehicle renter Hertz’s paper was under pressure, traders said.

The 6¼% senior notes due 2022 slipped ¾ point to close at 35 bid.

Late last week, the Estero, Fla.-based company announced that its chief financial officer would leave his position next month.

Jamere Jackson will leave the post on Sept. 11, when chief accounting officer Eric Esper will take his place.

The company is working through the bankruptcy process and seeking debtor-in-possession financing.

© 2015 Prospect News.
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