Laredo Petroleum notes improve on earnings; Cinemark better in entertainment space

By James McCandless

San Antonio, Nov. 5 – Thursday’s distressed debt session was awash with names releasing their results for the third quarter.

Laredo Petroleum, Inc.’s notes were seen improving after the company beat estimates in its third-quarter earnings release.

Fellow E&P company Antero Resources Corp.’s issues were also positive as a subsidiary sold a new issue of long five-year senior notes.

As oil futures backed off of some recent gains, Occidental Petroleum Corp.’s paper moved up while Callon Petroleum Co.’s notes varied.

Meanwhile, theater chain Cinemark Holdings, Inc.’s issues performed better despite reporting a loss for Q3.

Sector peer AMC Entertainment Holdings, Inc.’s paper diverged in direction.

In the property space, CBL & Associates Properties, Inc.’s notes drifted lower after a subsidiary was placed in the stable category by a ratings agency.

Mall owner Washington Prime Group, Inc.’s issues were carried upward.

Car rental name Hertz Global Holdings, Inc.’s paper was gaining ground as the company received a $4 billion fleet financing commitment.

Laredo trades higher

Laredo Petroleum’s notes were seen improving in the oil and gas space, traders said.

The 10 1/8% senior notes due 2028 shot up 4 points to close at 49¼ bid. The 9½% senior notes due 2025 reached up 3½ points to close at 53½ bid.

After the end of Wednesday activity, the Tulsa, Okla.-based independent oil and gas producer released its earnings report for the third quarter.

The company reported earnings per share of $4.02, outpacing the $3.32 per share profit that analysts had predicted.

Revenues were posted at $173.55 million, weaker than the consensus estimate.

Last month, Laredo entered into an amendment to its fifth amended and restated credit agreement, increasing the margin by 50 basis points at every level of the agreement’s pricing grid, Prospect News reported.

Also, the borrowing base was reaffirmed at $725 million, an anti-cash hoarding provision was added and the covenant limiting distributions was lowered.

Antero positive

Meanwhile, Antero Resources’ issues were also positive, market sources said.

The 5 1/8% senior notes due 2022 rose ½ point to close at 96 bid. The 5% senior notes due 2025 picked up 2¼ points to close at 81 bid.

On Thursday, the Denver-based producer’s subsidiaries Antero Midstream Partners LP and Antero Midstream Finance Corp. priced an upsized $550 million of long five-year senior notes at par to yield 7 7/8%.

Antero Midstream plans to use the proceeds to repay a portion of borrowings under the company’s credit facility.

Last week, the company announced plans to redeem all 5 3/8% senior notes due 2021.

The notes will be redeemed at par plus interest to the redemption date.

In its recent Q3 earnings report, Antero showed a profit of 5 cents per share and revenues of $895.34 million.

Oil futures off

As oil futures backed off of some recent gains, distressed energy names moved on different paths, traders said.

West Texas Intermediate crude oil futures for December delivery shaved off 36 cents to settle at $38.79 per barrel.

North Sea Brent crude oil futures for January delivery finished the day at $40.93 per barrel after a 30 cent slip.

Houston-based peer Occidental Petroleum’s paper moved upward.

The 2.9% senior notes due 2024 were lifted 1 point to close at 90¼ bid. The 2.7% senior notes due 2022 gained ¾ point to close at 97¼ bid.

Houston-based producer Callon Petroleum’s notes varied.

The Carrizo Oil & Gas, Inc.’s 6¼% senior notes due 2023 moved up 1¼ points to close at 42 bid. The 6 3/8% senior notes due 2026 shaved off ½ point to close at 27 bid.

Cinemark gains

Meanwhile, theater chain Cinemark’s issues performed better, market sources said.

The 5 1/8% senior notes due 2022 tacked on 1 point to close at 91 bid. The 8¾% senior secured notes due 2025 gained 1 point to close at 104¾ bid.

Before the market opened on Thursday, the Plano, Tex.-based movie theater operator issued its earnings results for the third quarter.

The company showed a loss per share of $1.25, higher than what analysts were expecting to be a $1.45 per share loss.

Revenues were lower than predicted at $35.48 million, significantly below the $821.82 million in revenue from this period last year.

As of the report’s release, the company has about 90% of its theaters open while customer demand remains low in the face of the coronavirus pandemic.

“It looks like they are in a better cash position going into the end of the year, but there’s little money coming in all the same,” a trader said.

Leawood, Kan.-based sector peer AMC’s paper diverged in direction.

The 10½% notes due 2026 chalked off ¼ point to close at 53¾ bid. The 12% paper due 2026 pushed up 1 point to close at 8 bid.

CBL notes drift

In the property space, CBL’s notes drifted lower, traders said.

The 5¼% senior notes due 2023 were docked ¼ point to close at 37¼ bid. The 4.6% senior notes due 2024 gave back ½ point to close at 37 bid.

Late Wednesday, the Chattanooga, Tenn.-based real estate investment trust’s subsidiary, CBL & Associates LP, saw a positive shift from Moody’s Investors Service.

The agency revised its outlook on the company to stable from negative and affirmed its ratings, including the senior unsecured debt at C.

On Monday, CBL filed for Chapter 11 bankruptcy to implement a plan to recapitalize the company, including restructuring portions of its debt.

Under the plan, unsecured holders are slated to receive 90% of new equity in exchange for the reduction of about $1.4 billion in debt.

Columbus, Ohio-based mall owner Washington Prime’s issues were carried upward.

The 6.45% senior notes due 2024 rose 1¾ points to close at 55¼ bid.

Hertz gains

Travel name Hertz’s paper was gaining ground on Thursday, market sources said.

The 6¼% senior notes due 2022 added ¾ point to close at 39¾ bid. The 5½% senior paper due 2024 garnered ½ point to close at 39¼ bid.

As the afternoon wound down, the Estero, Fla.-based car rental service announced that it has secured commitments for fleet financing totaling $4 billion and has filed a motion for approval, Prospect News reported.

Combined with the $1 billion in debtor-in-possession financing, the company will have access to up to $5 billion in total funding to support its fleet financing needs.

The hearing for approval is scheduled for Nov. 24.

Hertz filed for bankruptcy in May following the onset of the pandemic.

© 2015 Prospect News.
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