American Airlines notes eyed after Q2 results; AMC gains as theater reopenings delayed

By James McCandless

San Antonio, July 23 – During the Thursday distressed debt session, more focus was placed on travel-related names.

American Airlines Group Inc.’s notes varied in direction after releasing its earnings report for the second quarter.

Sector peer United Airlines Holdings, Inc.’s issues also saw diverging activity.

In the entertainment space, AMC Entertainment Holdings Inc.’s paper gained after the company delayed theater reopenings to August.

Meanwhile, REIT CBL & Associates Properties, Inc.’s notes were under pressure as a subsidiary extended its forbearance agreements.

Mall owner Washington Prime Group, Inc.’s issues drifted lower.

Business software name Exela Technologies, Inc.’s paper shot up in the run-up to announcing a divestment of its records storage business.

Oil futures spent the session falling, joined by Whiting Petroleum Corp.’s and Valaris plc’s notes while Occidental Petroleum Corp.’s issues finished mixed.

Airlines in focus

American Airlines’ notes varied in direction at Thursday’s end, traders said.

The 5% senior notes due 2022 improved by 1 point to close at 58¾ bid. The 3¾% senior notes due 2025 dipped ½ point to close at 49½ bid.

On Thursday morning, the Fort Worth-based air carrier released its second-quarter earnings report, yielding mixed results.

The company showed a loss per share of $7.82, worse than what analysts were expecting at a $6.75 per share loss.

Revenues exceeded analyst predictions at $1.62 billion.

At this point last year, the company clocked $11.96 billion in revenue.

American’s cash burn rate came in at $55 million per day, better than expected.

“There are some positives below the topline,” a trader said. “I think there’s a bit to be optimistic about heading into the end of 2020.”

Chicago-based sector peer United Airlines’ issues also saw diverging activity.

The 5% senior notes due 2024 dropped 1¼ points to close at 83¼ bid. The 4¼% senior notes due 2022 picked up 2¼ points to close at 90¼ bid.

AMC gains

In the entertainment space, AMC’s paper gained ground, market sources said.

The 6 1/8% senior subordinated paper due 2027 tacked on 2¾ points to close at 29¾ bid.

The Leawood, Kan.-based movie theater chain announced on Thursday that it would delay the reopening of its locations to mid-to-late August.

The company had previously planned on reopening on July 30.

On Wednesday, lenders for the name alleged that the company is in default after claiming it did not provide adequate information on a debt swap.

Despite the company providing additional information, the group representing a $2 billion term loan continues to assert the alleged default.

Last week, the company raised $300 million from a private equity firm as part of its debt cutting measures.

CBL trades lower

Meanwhile, property name CBL’s notes were under pressure, traders said.

The 4.6% senior notes due 2024 shaved off ¼ point to close at 26 bid.

On Thursday, the Chattanooga, Tenn.-based real estate investment trust CBL & Associates LP amended each of the forbearance agreements with holders of its 5¼% senior notes due 2023, holders of its 5.95% senior notes due 2026 and lenders of its credit agreement dated Jan. 30, 2019, Prospect News reported.

The creditors agreed to extend the respective forbearance periods under each of the agreements under the completed amendments.

The 2023 and 2026 notes forbearance was extended to July 27 while the credit agreement forbearance is slated to expire on July 29.

Last week, reports indicated that the company is considering filing for Chapter 11 bankruptcy.

Columbus, Ohio-based mall owner Washington Prime’s issues drifted lower.

The 6.45% senior notes due 2024 declined by ¾ point to close at 39¾ bid.

Exela up

Software name Exela’s paper shot up through the day’s activity, market sources said.

The 10% senior notes due 2023 garnered ¾ point to close at 25½ bid.

The Irving, Tex.-based business software developer’s structure was active in the run-up to the company’s afternoon announcement that it has completed a $12.3 million asset sale.

The company sold its physical records storage and logistics segment as part of its initiative to divest in non-strategic business assets.

Since the initiative started in November 2019, Exela says it has raised between $150 million and $200 million.

Oil trends down

Elsewhere, oil futures spent the session falling, followed by distressed energy names, traders said.

West Texas Intermediate crude oil futures for September delivery slipped 83 cents to settle at $41.07 per barrel.

North Sea Brent crude oil futures for September delivery capped the day at $43.31 after a 98 cent dip.

Denver-based independent oil and gas producer Whiting Petroleum’s notes joined the sector trend.

The 6¼% senior notes due 2023 fell ½ point to close at 20 bid. The 6 5/8% senior notes due 2026 shed 1¼ points to close at 19 bid.

London-based contract driller Valaris’ issues were also weaker.

The 7¾% senior notes due 2026 lost 1¾ points to close at 6¼ bid.

Houston-based producer Occidental Petroleum’s paper finished with mixed results.

The 2.9% senior notes due 2024 picked up ¼ point to close at 93¾ bid. The 2.7% senior paper due 2022 chalked off ¼ point to close at 96¼ bid.

© 2015 Prospect News.
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