PHI rises in shaky offshore transportation space; Neiman Marcus mixed after lawsuit news

By James McCandless

San Antonio, Dec. 11 – Trading in the distressed space continued to focus on news-driven names on Tuesday with muted volume.

PHI, Inc.’s notes were up as the market increases scrutiny on the offshore aviation space.

Sector peer Bristow Group Inc.’s notes were also rising.

In retail, Neiman Marcus Group Inc.’s paper was mixed a day after a major creditor announced a lawsuit against the company.

Meanwhile, Revlon, Inc.’s notes were also mixed.

In the oil space, improvements in oil futures saw concurrent positivity in California Resources Corp.’s notes and Weatherford International plc’s issues while Sanchez Energy Corp.’s paper declined.

Coal name Cloud Peak Energy Inc.’s notes continue to be a negative market target.

Frontier Communications Corp.’s issues were mixed.

PHI and Bristow move up

PHI’s notes were rising, traders said.

The 5¼% notes due 2019 picked up ¾ point to close at 80¼ bid.

The Lafayette, La.-based offshore aviation name’s notes fell into distressed territory in October after the company announced the termination of a cash tender offer for the $500 million outstanding of its 5¼% notes. It saw increased trading on Tuesday as more attention comes to its sector, market sources said.

“Recent developments in this space means more eyes are on it now,” a trader said. “There’s a lot of shakiness here that is poised to move into next year.”

Houston-based sector peer Bristow Group’s notes were also higher.

The 6¼% notes due 2022 rose 4¾ points to close at 47¾ bid.

The company’s notes have been on a steady downward trend since it announced the acquisition of rival Columbia Helicopters for $560 million.

“The feeling on that is pretty much the same as when it was announced, which is that not many people are positive on the deal,” a trader said. “The chatter right now is that more creditors are souring on it.”

The company announced the news along with an earnings loss of 69 cents per share for the second quarter and the retirement of chief executive officer Jonathan Baliff.

Neiman Marcus, Revlon mixed

Meanwhile, Neiman Marcus’ paper was mixed, market sources said.

The 8% paper due 2021 gained ¾ point to close at 49 bid. The 7 1/8% paper due 2028 lost 1½ points to close at 69½ bid.

On Monday, prominent creditor Marble Ridge Capital filed a lawsuit against the Dallas-based luxury retailer, alleging that the private equity transfer of e-commerce segment MyTheresa hurts creditors in a potential default by making less collateral available.

Restructuring talks between the company and its creditors were halted recently without a resolution.

“It’s going to be a topical name for some time,” a trader said.

Elsewhere, New York City-based cosmetics producer Revlon’s notes were mixed.

The 5¾% notes due 2021 traded up ½ point to close at 81¼ bid. The 6¼% notes due 2024 fell 2 points to close at 55½ bid.

CalRes higher, oil active

In the oil and gas space, California Resources’ issues were higher, traders said.

The 8% notes due 2022 recouped the 4½ points that were lost on Monday to close at 77½ bid.

The Los Angeles-based independent oil and gas producer once again tracked the direction of oil futures.

“I think we’re going to be in a holding pattern until after Christmas,” a trader said. “A lot of the trading we’re seeing now, at least in distressed, won’t deviate too much barring major news.”

Baar, Switzerland-based oilfield services company Weatherford’s 9 7/8% paper due 2024 picked up ¼ point to close at 66¼ bid.

Houston-based producer Sanchez Energy’s 6 1/8% notes due 2023 dropped ¾ point to close at 20¼ bid.

West Texas Intermediate crude oil futures finished the Tuesday session 65 cents higher, ending the day at $51.65 per barrel. North Sea Brent crude futures settled at $60.20 per barrel with a 23 cent gain.

Cloud Peak falls

Away from oil, Cloud Peak’s issues were descending, market sources said.

The 6 3/8% notes due 2024 dropped 3 points to close at 17 bid. The 12% notes due 2021 lost 4¼ points to close at 60 bid.

The Gillette, Wyo.-based coal producer’s issues have been falling further into distressed territory after the company announced a review of strategic alternatives and the termination of its undrawn credit agreement with PNC Bank.

“It looks like the 6 3/8’s are going to zero out,” a trader said. “They’re just getting chewed out every day.”

Frontier mixed

Leading the distressed telecom space, Norwalk, Conn.-based wireline telecom name Frontier’s paper was mixed, traders said.

The 7 5/8% paper due 2024 lost 1 point to close at 55¾ bid. The 10½% paper due 2022 added ¼ point to close at 75¾ bid. The 11% paper due 2025 picked up 1½ points to close at 68 bid.

“Frontier’s been overshadowed by the likes of Intelsat and Altice, but today they were more active,” a trader said. “There wasn’t really a reason for it.”

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