Transocean, Nabors, PBF slide; Talen better; Spider-Man lifts AMC bonds; Mallinckrodt up

By Cristal Cody

Tupelo, Miss., Nov. 30 – Distressed names in the oil and gas space slid about 2 points to 4 points in secondary trading on Tuesday as market tone weakened on concerns surrounding the Covid-19 Omicron variant.

Offshore driller Transocean Inc.’s paper traded about 3 points to 4 points weaker over the day.

Oil and gas drilling contractor Nabors Industries Inc.’s senior notes were down 2½ points to 2¾ points.

Petroleum refiner PBF Energy Inc.’s 6% senior notes due 2028 (Caa1/B/B+) declined 2 points.

Occidental Petroleum Corp.’s junk notes also fell 2 points.

“Nabors, Transocean, Oxy Petroleum are all down,” a source said. “Oil bounced back a little bit.”

Oil prices were unchanged to weaker by the close after improving on Monday following a steep decline on Friday.

West Texas Intermediate crude oil benchmark futures for January deliveries slid $3.77 to settle Tuesday at $66.18 a barrel after gaining $1.80 on Monday.

High-grade and junk primary market action cooled on Tuesday as measured volatility soared and stock indices sank over 1.5% on ramifications from the latest Covid-19 Omicron variant.

The Chicago Board Options Exchange’s CBOE Volatility index jumped 20.34% by the close to 27.63.

The iShares iBoxx High Yield Corporate Bond ETF shed 36 cents to $85.64 after climbing 53 cents in the prior session.

In other distressed secondary activity, Talen Energy Supply LLC’s 4.6% notes due Dec. 15, 2021 (Caa1/CCC/B-) traded over 2 points higher.

AMC Entertainment Holdings, Inc.’s bonds also rallied on news the company has seen strong presale orders amid a promotion for the Dec. 16 opening of Spider-Man: No Way Home.

“They have improved mainly off the Spider-Man news,” a source said. “The 12% second liens were down 4½ points on Friday but now they’re back up at 102.”

Mallinckrodt plc’s paper also improved after the company received a third extension to file and solicit votes on its Chapter 11 bankruptcy plan.

Transocean, Nabors down

Transocean’s 6.8% notes due 2038 (C/CCC-/) dropped 4 points to 49½ bid on $5.25 million of secondary volume on Tuesday, a source said.

The Vernier, Switzerland-based offshore driller’s 7¼% notes due 2025 (Ca/CC) were down nearly 3 points at 72 bid on $2 million of activity.

Elsewhere in the space, Nabors Industries’ 7¼% senior notes due 2026 (Caa1/CCC-) shed 2¾ points to 86 bid on $3 million of volume.

The Bermuda- and Houston-based oil and gas drilling contractor’s 7½% senior notes due 2028 (Caa1/CCC-) also dropped 2½ points to 85 bid on $1 million of supply.

In stronger trading action over the day, Parsippany, N.J.-based petroleum refiner PBF’s 6% senior notes due 2028 (Caa1/B/B+) declined 2 points to 60 bid on nearly $9.5 million of volume.

Talen higher

In other energy issues, Talen Energy’s notes gained in light trading ahead of the company’s earnings release later in the week, a source said.

Talen’s 4.6% notes due Dec. 15, 2021 (Caa1/CCC/B-) traded over 2 points higher at the 94 bid area.

The Woodlands, Tex., and Allentown, Pa.-based power company is scheduled to hold its third-quarter conference call on Thursday.

AMC improves from Friday

AMC’s 12% second-lien senior secured notes due 2026 (Ca/CCC-) dipped ¾ point over the session but remain about ¾ point stronger from where the issue went out on Friday, sources report.

The 12% notes have soared from trading at the start of the year at 27 bid.

AMC’s 5¾% senior subordinated notes due 2025 (Ca/CCC-) were “trading mainly in odd lots” over the day, one source said.

The issue was quoted mostly unchanged at the 78½ to 80 bid range after dropping about 5 points on Friday.

AMC’s subordinated notes traded at the start of the year at 33½ bid.

The Leawood, Kan.-based movie theater owner announced on Saturday that members of its special customer groups, including AMC Stubs Premiere and AMC Investor Connect, who advance purchase or reserve opening-day tickets to the new Spider-Man movie will receive an exclusive Spider-Man NFT with 86,000 NFTs expected to be available.

Mallinckrodt better

In other trading, Mallinckrodt’s bonds improved after the company received a third extension to file and solicit votes on its Chapter 11 bankruptcy plan, a source said.

The 5¾% senior notes due 2022 climbed 1½ points to 57½ bid on $8 million of secondary action on Tuesday.

The notes were down ½ point by the close on Monday.

A court order filed Monday extended the plan filing period by 120 days through March 8 and the solicitation period by 120 days through May 10, 2022.

The Dublin- and St. Louis-based pharmaceutical maker’s paper has rallied over 10 points in November.

Distressed returns weak

Distressed index returns remained soft as the week kicked off on Monday.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return improved to minus 0.15% on Monday from minus 0.97% in the short holiday session on Friday.

Month-to-date total returns widened to minus 5% from minus 4.86% ahead of the weekend.

Year-to-date total returns fell to 22.57% on Monday from 22.76% on Friday.

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