WeWork lower as layoffs expected; Chemours down after liability talk

By James McCandless

San Antonio, Oct. 23 – Shifts in Wednesday’s distressed session came from those generating news this week.

WeWork Cos. Inc.’s notes extended a negative shift as reports indicated that the company will enact layoffs after securing rescue financing.

Elsewhere, in chemicals, Chemours Co.’s issues moved down after a former DuPont executive made comments about its liabilities.

Oil and gas name Range Resources Corp.’s paper improved in the wake of its announcement of asset sales and a share buyback.

As oil futures moved upward, California Resources Corp.’s, McDermott International, Inc.’s and Antero Resources Corp.’s notes dipped.

Meanwhile, loan manager Navient Corp.’s issues shot up after the company announced third-quarter results and a share repurchase program.

The pharma space saw Teva Pharmaceutical Industries Ltd.’s paper taper off recent gains as Mallinckrodt plc’s notes also moved lower.

WeWork loses

WeWork’s notes extended a negative run on Wednesday, traders said.

The 7 7/8% senior notes due 2025 declined by 1½ points to close at 83¼ bid.

About $16 million of the notes were on the tape by the close.

On Wednesday, news broke that the New York-based coworking company is poised to lay off thousands of its employees a day after reaching a deal to secure $8 billion in rescue financing.

The rescuer, SoftBank, is the company’s largest backer and will increase its stake in the name to 80 percent.

Former chief executive officer Adam Neumann is expected to receive a $185 million consulting fee and approximately $1 billion in proceeds from the sale of his stock.

A flubbed initial public offering led to Neumann’s resignation and a drastically reduced valuation for the company.

Chemours down

Elsewhere, in the chemicals space, Chemours’ issues moved downward, market sources said.

The 5 3/8% senior notes due 2027 lost 1½ points to close at 88½ bid.

The Wilmington, Del.-based chemicals producer’s issues were under pressure after a former DuPont executive said in a court filing that the company, a 2015 spinoff of DuPont, was never meant to assume “unlimited exposure” from its former parent.

Former chairman and chief executive officer Ellen Kullman said that when the spinoff was executed under her watch, it was never the company’s intention to have the company assume responsibility for an unlimited amount of DuPont’s historical liabilities.

Chemours filed a lawsuit against DuPont in May, accusing executives of misleading it about the extent of the liabilities it faces over recent environmental hazards.

“It’s a fight that they’ve been having for basically its entire existence,” a trader said. “The question of how much liability they can sustain will weigh on them for the foreseeable future.”

Range improves

Oil and gas name Range Resources’ paper improved, traders said.

The 5% senior paper due 2023 gained 1¼ points to close at 86 bid.

On Monday, the Fort Worth-based independent oil and gas producer announced that its bank commitments have increased to $2.4 billion from $2 billion, though the borrowing base under its credit facility remains at $3 billion.

The company also said that it had received $150 million from a recent asset sale of royalty interests from property in southern Appalachia.

Concurrently, the name announced a $100 million share repurchase program.

As a result, S&P Global Ratings said that it placed its corporate family rating, probability of default rating and two issue-level ratings under review for a downgrade.

Oil names dip

An upward push in oil futures did not translate to positivity in distressed energy names, market sources said.

Futures performed better after the United States reported a drop in crude oil inventories.

West Texas Intermediate crude oil futures for December delivery jumped up $1.49 to settle at $55.97 per barrel.

North Sea Brent crude oil futures for December delivery finished at $61.17 per barrel after a $1.47 gain.

Los Angeles-based producer California Resources’ notes dipped.

The 6% senior notes due 2024 dived 4 points to close at 28 bid. The 8% senior secured notes due 2022 shed 1 point to close at 44½ bid.

Houston-based oil and gas engineering name McDermott’s issues followed suit.

The 10 5/8% senior notes due 2024 lost 3½ points to close at 18¼ bid.

Denver-based sector peer Antero’s paper was also under water.

The 5 1/8% senior paper due 2022 shaved off ½ point to close at 79 bid. The 5 5/8% senior paper due 2023 fell ¼ point to close at 76¼ bid.

Navient up

Meanwhile, Navient’s notes shot up by the close, traders said.

The 5 5/8% notes due 2033 added 1½ points to close at 85½ bid.

Early Wednesday, the Wilmington, Del.-based educational loan manager released its third-quarter earnings report.

The company reported a 62 cents per share profit, better than the 56 cents per share profit expected by analysts.

It also announced that its board of directors has authorized a new share repurchase program for up to $1 billion of its common stock.

Teva, Mallinckrodt negative

The pharma space saw Teva’s issues taper off recent gains, market sources said.

The 6¾% senior notes due 2028 dropped 1½ points to close at 90½ bid. The 4 7/8% senior notes due 2020 slipped 1 point to close at 59¾ bid.

The Petach Tikva, Israel-based generic drug producer’s structure has received heightened attention in recent days after the company said it had reached a settlement in a federal trial and a larger blanket settlement for any and all pending litigation.

The company announced that it had reached a tentative agreement to donate medicine it values at $23 billion over the next ten years along with a cash payment of $250 million to opioid-related victims.

Staines-upon-Thames, England-based sector peer Mallinckrodt’s paper also went negative.

The 4 7/8% senior paper due 2020 lost 1 point to close at 59¾ bid.

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