L Brands notes improve following earnings release; Antero declines amid ratings cut

By James McCandless

San Antonio, Aug. 20 – The Thursday session in the distressed debt space saw a focus on retail and energy names.

L Brands, Inc.’s notes moved to better levels after releasing surprisingly positive second-quarter earnings results.

Sector peer Revlon, Inc.’s issues were trailing as Citigroup wins more cases to freeze funds mistakenly distributed to its lenders.

Meanwhile, in oil and gas, Antero Resources Corp.’s paper was seen lower after receiving a ratings downgrade.

With weaker oil futures as the backdrop, Occidental Petroleum Corp.’s, Whiting Petroleum Corp.’s and Valaris plc’s notes improved.

Auto parts maker Tenneco Inc.’s issues gained as its ratings were pulled from CreditWatch with negative implications.

Elsewhere, REIT CBL & Associates Properties, Inc.’s paper differed in direction after coming to a restructuring agreement with lenders.

Mall owner Washington Prime Group Inc.’s notes were carried higher.

L Brands better

L Brands’ notes moved to better levels as Thursday concluded, traders said.

The 6¾% senior notes due 2036 rose ½ point to close at 98½ bid. The 5¼% senior notes due 2028 picked up 2½ points to close at 95 bid.

After the close on Wednesday, the Columbus, Ohio-based department store company reported a surprisingly positive second-quarter earnings report.

The retailer reported a per share profit of 25 cents, outpacing analyst estimates of a 34 cents per share loss.

Revenues were pegged at $2.32 billion.

Net sales were reported at $2.9 billion, though its Victoria’s Secret unit showed a 39% drop in sales.

Meanwhile, the company’s Bath & Body Works segment reported an 87% jump in comparable-store sales.

“I think it just makes a better case for them to spin off Bath & Body Works,” a trader said.

Revlon trails

Sector peer Revlon’s issues were seen trailing, market sources said.

The 5¾% senior notes due 2021 dipped 1½ points to close at 21½ bid. The 6¼% senior notes due 2024 crashed 7 points to close at 10 bid.

During this week, the New York-based cosmetics producer’s lenders have had hundreds of millions of dollars of funds frozen that Citigroup says was mistakenly distributed to them.

On Tuesday, the bank won a court order to freeze $175 million sent to Brigade Capital Management.

The next day, $127.3 million and $109.7 million were frozen that were sent to HPS Investment Partners LLC and Symphony Asset Management LLC, respectively.

Concurrently, UMB Bank, another creditor, has sued the company for alleged intellectual property theft by transferring billions to use as collateral.

Antero declines

Meanwhile, in oil and gas, Antero Resources’ paper was seen trading lower, traders said.

The 5 5/8% senior paper due 2023 gave up 1½ points to close at 76 bid. The 5% senior notes due 2025 chalked off 1 point to close at 68½ bid.

Late Thursday, the Denver-based independent oil and gas producer received a ratings downgrade from Fitch Ratings.

The agency cut its senior unsecured notes to B-/RR5 from B/RR4, removed the rating watch negative and assigned a negative outlook.

Fitch sites the company’s recent asset sales and convertible issuance for increasing the likelihood of managing the closest parts of the company’s maturity wall.

Oil in focus

With weaker oil futures serving as the backdrop, distressed energy tranches improved, market sources said.

West Texas Intermediate crude oil futures for September delivery were pushed 35 cents lower to close at $42.58 per barrel.

North Sea Brent crude oil futures for October delivery capped the day at $44.90 per barrel after a 47 cent slip.

Houston-based producer Occidental Petroleum’s notes were tracking upward.

The 2.9% senior notes due 2024 added 1¼ points to close at 91¾ bid. The 2.7% senior notes due 2022 tacked on ½ point to close at 98 bid.

Denver-based E&P Whiting Petroleum’s issues followed the trend.

The 6¼% senior notes due 2023 gained ¾ point to close at 22 bid. The 6 5/8% senior notes due 2026 moved up ¾ point to close at 20¼ bid.

London-based contract driller Valaris’ paper picked up steam.

The 5.2% senior notes due 2025 rose ¾ point to close at 5¾ bid. The 7¾% senior paper due 2026 gained ¾ point to close at 6½ bid.

Tenneco up

Auto parts maker Tenneco’s notes were gaining as the afternoon ended, traders said.

The 5% senior notes due 2026 inched up ¼ point to close at 77 bid.

During Thursday activity, the Lake Forest, Ill.-based automotive parts manufacturer saw a ratings shift from S&P Global Ratings.

The agency removed all of its ratings from CreditWatch with negative implications.

S&P said that the change was made after considering a year-over-year drop in the second-quarter revenue due to coronavirus-related plant shutdowns.

Total revenue fell 41% year over year.

The outlook is negative.

CBL eyed

Elsewhere, property name CBL’s issues were flat to slightly higher, market sources said.

The 5¼% senior notes due 2023 closed level at 36½ bid. The 4.6% senior notes due 2024 picked up ¼ point to close at 36¾ bid.

On Wednesday, the Chattanooga, Tenn.-based real estate investment trust announced that it reached a restructuring agreement with noteholders representing more than 57% of the operating partnership’s 2023 notes, 2024 notes and the 5.95% senior unsecured notes due 2026.

As part of the plan, the company hopes to eliminate $1.4 billion of unsecured notes in exchange for the issuance of $500 million of new senior secured notes due June 2028, plus about $50 million of cash and 90% of the new common equity for unsecured holders.

An agreement with senior secured lenders is pending.

Columbus, Ohio-based mall owner Washington Prime’s paper was carried higher.

The 6.45% senior notes due 2024 jumped up 5¼ points to close at 50½ bid.

© 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.