Transocean notes rise after posting quarterly results; Tupperware in focus amid upgrade

By James McCandless

San Antonio, Nov. 4 – As the week reached its midpoint, the distressed debt market turned its attention to energy names.

Transocean Ltd.’s notes were on the rise after the company released its earnings results for the third quarter.

Sector peer Callon Petroleum Co.’s issues were carried higher despite receiving a ratings downgrade.

On another day of improving oil futures, Occidental Petroleum Corp.’s and Antero Resources Corp.’s paper gained.

Elsewhere, housewares maker Tupperware Brands Corp.’s notes were active but unchanged as the company received a ratings upgrade.

Theater chain AMC Entertainment Holdings, Inc.’s issues were boosted as the company seeks a capital injection after its Q3 earnings release.

Movie name Cinemark Holdings, Inc.’s paper followed the positive trend.

Meanwhile, in retail, PetSmart, Inc.’s notes improved as Nordstrom, Inc.’s issues were under pressure.

Transocean improves

Transocean’s notes were on the rise through Wednesday, traders said.

The 7½% senior notes due 2026 garnered 2 points to close at 23 bid. The 6½% senior notes due 2020 shot up 1½ points to close at 96½ bid.

After the close on Tuesday, the Steinhausen, Switzerland-based contract driller reported its earnings results for the third quarter.

The company reported an 11 cents per share loss, better than the 17 cents per share loss that analysts had expected.

Revenues came in at $773 million, underperforming predictions.

“The results were a mixed bag and everyone decided to latch onto the earnings beat,” a trader said. “They also showed some numbers below the top line that were encouraging.”

Transocean reported that it had a backlog of $8.2 billion.

Last week, Transocean said that as part of the early tender results for its five-series tender offer, $347,638,000 of notes had been tendered.

The offer expires on Nov. 9.

Callon higher

Sector peer Callon Petroleum’s issues were carried higher, market sources said.

The Carrizo Oil & Gas Inc. 6¼% senior notes due 2023 rose 3¾ points to close at 40¾ bid. The 8¼% senior notes due 2025 reached up ½ point to close at 30½ bid.

Toward the end of the Tuesday session, the Houston-based independent oil and gas producer received a ratings cut from S&P Global Ratings.

The agency shaved its ratings and its unsecured notes to CC from CCC+ and B-, respectively.

The move came after the company’s announcement that it had agreed to exchange $286 million of its existing notes from four series for up to $158.5 million of newly issued 9% second-lien senior secured notes due 2025.

S&P said that because the exchange will be set at a weighted-average ratio of $555 per $1,000 of principal exchanged, the agency considers that exchange distressed.

The outlook is negative, and further downgrades are expected once the deal closes.

Oil improves

On another day of improving oil futures, distressed energy names gained, traders said.

West Texas Intermediate crude oil futures for December delivery moved up $1.49 to finish at $39.15 per barrel.

North Sea Brent crude oil futures for January delivery capped the day at $41.23 per barrel after a $1.52 markup.

Houston-based independent oil and gas producer Occidental Petroleum’s paper experienced an upward shift.

The 2.9% senior notes due 2024 improved by 3 points to close at 89¼ bid. The 2.7% senior paper due 2022 rose 1½ points to close at 96½ bid.

Denver-based E&P Antero Resources’ notes were similarly positive.

The 5 1/8% senior notes due 2022 garnered 1¼ points to close at 95½ bid. The 5% senior notes due 2025 were lifted ¾ point to close at 78¾ bid.

Tupperware active, flat

Elsewhere, housewares name Tupperware’s issues were active but ultimately unchanged, market sources said.

The 4¾% senior notes due 2021, while dipping as low as 100 bid during the session, closed unchanged at 100½ bid.

On Wednesday afternoon, the Orlando, Fla.-based housewares manufacturer received a ratings upgrade from S&P.

The agency raised Tupperware’s rating to CCC from CCC- and its senior unsecured notes to CCC- from D.

The upgrade came in reaction to the company’s announced plans to redeem all $380.2 million outstanding senior notes.

With the expected completion of the proposed refinancing with reasonable terms, maintenance of adequate liquidity, and continued improvements to operating performance, ratings could be improved to B or B+.

The closing of the facilities is expected in the fourth quarter of 2020.

AMC, Cinemark boosted

Theater chain AMC’s paper received a boost on Wednesday, traders said.

The 10½% notes due 2025 added 1¼ points to close at 55¼ bid. The 12% paper due 2026 grabbed 1¼ points to close at 7 bid.

The Leawood, Kan.-based movie theater operator’s structure was carried upward with the rest of the market two days after the release of its Q3 earnings.

The company reported a loss per share of $5.70 and revenues of $119.5 million, a mixed showing.

Also early this week, AMC filed a plan with the Securities and Exchange Commission to sell 20 million shares of its common stock that is expected to raise about $50 million.

Plano, Tex.-based peer Cinemark’s notes followed the positive trend.

The 5 1/8% senior notes due 2022 rose 1½ points to close at 90 bid. The 4 7/8% senior notes due 2023 picked up ½ point to close at 85 bid.

PetSmart up

Meanwhile, in the retail space, PetSmart’s issues followed the overall positivity of the market, market sources said.

The 8 7/8% senior notes due 2025 tacked on 1 point to close at 100¾ bid. The 5 7/8% senior notes due 2025 reached up ½ point to close at 101¾ bid.

PetSmart is a Phoenix-based pet supplies chain.

Separately, Seattle-based department store name Nordstrom’s paper was under pressure.

The 5% senior notes due 2044 shaved off ¼ point to close at 71½ bid.

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