Wesco Aircraft notes bounce off lows; GTT inks restructuring agreement; Transocean up

By Abigail W. Adams

Portland, Me., Sept. 2 – Volume remained light in the distressed debt secondary space on Thursday with the already lethargic pace of the bond market further hampered by the destruction Hurricane Ida wrought on the East Coast.

However, several distressed credits improved amid the thin liquidity.

Transocean Inc.’s junk bonds were active and on the rise alongside crude oil futures.

Wolverine Escrow’s junk bonds (Wesco Aircraft Holdings Inc.) remained in focus following a multipoint slide the previous session.

The shorter duration tranche was bouncing off its lows in active trading while the longer duration tranche was largely unchanged.

GTT Communications, Inc.’s 7 7/8% notes due 2024 rose after the company announced it had reached a restructuring agreement with creditors and will file a pre-packaged bankruptcy case.

Transocean on the rise

Transocean’s junk bonds were on the rise on Thursday as crude oil futures resumed their climb.

The offshore drilling contractor’s 6.8% senior notes due 2038 rose 1 point to 57.

The notes have climbed 4 points on the week.

The notes continued their upward momentum on Thursday on a strong day for energy.

WTI crude oil futures rose to settle at $69.67, an increase of $1.08 or 1.57%.

Brent crude oil futures climbed to $72.74, an increase of $1.15 or 1.61%.

Crude oil futures wavered between gains and losses on Wednesday as OPEC met and announced its decision to stick with the July agreement to increase oil output.

WTI crude oil futures were on the rise on Thursday following a larger-than-expected draw from U.S. inventories.

Wesco Aircraft rebounds

Wolverine Escrow’s junk bonds remained in focus on Thursday although the tranches were mixed following a multipoint decline the previous session.

Wolverine Escrow is the issuing entity for Wesco Aircraft Holdings, which now does business as Incora following its merger with Platinum Equity’s Pattonair in early 2020.

The 8½% senior notes due 2024 rose about ½ point. They were changing hands in the 90½ to 90¾ context heading into the market close, a source said.

The notes remained active with more than $13 million in reported volume.

However, the 9% senior notes due 2026 were largely unchanged. They continued to trade in the 90 to 90¼ context in high-volume activity.

There was about $20 million in reported volume during Thursday’s session.

Both tranches sank about 5 points in active trading on Wednesday following disappointing earnings and the resignation of the company’s chief financial officer.

GTT agreement

GTT Communications’ 7 7/8% senior notes due 2024, which have been in default since a missed interest payment in May, were on the rise after the company announced it had reached an agreement with creditors and would file for pre-packaged bankruptcy.

The 7 7/8% notes traded up to 15½ on Thursday in light volume.

GTT announced that it intended to file a pre-packaged bankruptcy case after reaching an agreement with creditors on Thursday.

The 7 7/8% notes, which are unsecured, are GTT’s sole junk bond. The cloud networking services provider initially priced a $300 million issue of the 7 7/8% notes at par in December 2016.

It priced an add-on of $150 million at 106 in May 2017 and a subsequent add-on of $125 million at 106 in September 2017, lifting the total size of the issue to $575 million.

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