Whiting eyed as CEO change announced; Revlon notes decline amid dual lender disputes

By James McCandless

San Antonio, Aug. 14 – As the week came to its conclusion, the distressed debt space continued focusing on the energy and retail sectors.

Whiting Petroleum Corp.’s notes varied in direction as news broke of an impending chief executive officer change.

A day of losses for oil futures was mirrored by Occidental Petroleum Corp.’s, Valaris plc’s and Transocean Ltd.’s issues.

Meanwhile, in retail, Revlon, Inc.’s paper lost ground as a second dispute surrounding its lenders emerged.

Sector peer L Brands, Inc.’s notes diverged throughout the day.

Real estate name WeWork Cos. Inc.’s issues declined after receiving a $1.1 billion commitment from large investor SoftBank.

Elsewhere, in the travel space, Hertz Global Holdings, Inc.’s paper moved in mixed directions as it works through its bankruptcy.

Air and rail manufacturer Bombardier Inc.’s notes were seen trailing at the end of the week.

Whiting varies

Whiting Petroleum’s notes varied in direction as the week wound down, traders said.

The 6¼% senior notes due 2023 held level to close at 19 bid. The 6 5/8% senior notes due 2026 picked up 1 point to close at 19½ bid.

During the Friday session, the Denver-based independent oil and gas producer announced that CEO and chairman of the board Bradley Holly would resign from the company upon its emergence from bankruptcy.

Replacing him will be long-time energy executive Lynn Peterson while board member Kevin McCarthy will assume the chairmanship.

The company is expected to exit its bankruptcy proceedings on Sept. 1.

After energy prices crashed in March and April, Whiting filed for Chapter 11 bankruptcy with a plan to slash its debt by $2.2 billion.

Oil trades down

Meanwhile, West Texas Intermediate crude oil futures for September delivery shed 23 cents to settle at $42.01 per barrel.

North Sea Brent crude oil futures for October delivery ended the week at $44.80 per barrel after a 16 cent loss.

Houston-based independent oil and gas producer Occidental Petroleum’s issues followed futures to lower levels.

The 2.9% senior notes due 2024 fell 2¾ points to close at 90½ bid. The 2.7% senior notes due 2022 shaved off ¼ point to close at 97 bid.

London-based contract driller Valaris’ paper joined the trend.

The 5.2% senior notes due 2025 chalked off 2 points to close at 3 bid. The 7¾% senior paper due 2026 gave up 1½ points to close at 4 bid.

Steinhausen, Switzerland-based peer Transocean’s notes also weakened.

The 6½% senior notes due 2020 lost 1¼ points to close at 98 bid. The 7½% senior notes due 2031 slipped ¼ point to close at 26¾ bid.

Revlon lower

Meanwhile, in the retail space, Revlon’s issues spent the day losing ground, traders said.

The 5¾% senior notes due 2021 dropped ¼ point to close at 22 bid. The 6¼% senior notes due 2024 dived 6¼ points to close at 9½ bid.

On Friday, reports indicated that Citigroup was attempting to recoup $900 million in payouts to the New York-based cosmetics producer’s lenders.

The financial services firm said that the $900 million was a clerical error, some of which has been paid back.

This is the second lender dispute in as many days, after some of the same lenders filed a lawsuit against the company claiming theft of intellectual property.

UMB Bank alleges that the name improperly transferred $1.8 billion in intellectual property rights to be used as collateral to finance an acquisition.

The bank wants a court to return the collateral.

Columbus, Ohio-based sector peer L Brands’ paper diverged throughout the day.

The 6¾% senior notes due 2036 picked up ¼ point to close at 94½ bid. The 5¼% senior paper due 2028 shed ¼ point to close at 90 bid.

WeWork declines

Meanwhile, WeWork’s notes were in decline, market sources said.

The 7 7/8% senior notes due 2025 fell 2½ points to close at 68 bid.

After the close on Thursday, news broke that the New York-based coworking company has received a $1.1 billion commitment from large investor SoftBank.

In an e-mail about second-quarter results, the company said that it had reduced its cash burn rate to $482 million, almost half of its level from the end of last year.

The company reported revenues of $882 million.

“They’ve said before that they are going to be cash flow positive by the end of the year,” a trader said. “I think these numbers show that it is possible.”

Hertz mixed

Elsewhere, in the travel space, Hertz’s issues saw mixed activity, traders said.

The 6¼% senior notes due 2022 added 2¾ points to close at 35¾ bid. The 5½% senior notes due 2024 declined by ¼ point to close at 36 bid.

This week, the Estero, Fla.-based vehicle renter’s structure saw elevated attention as the market received updates on its bankruptcy process.

On Tuesday, the company received court approval to use sidecar cash collateral to repay a sidecar credit facility from pre-bankruptcy.

Concurrently, Hertz is also looking for debtor-in-possession financing.

Bombardier trails

Air and rail builder Bombardier’s paper trailed to end the week, market sources said.

The 7½% senior notes due 2025 were pushed down by 2½ points to close at 73 bid. The 6% senior paper due 2022 was docked 1 point to close at 84 bid.

In the last few week, the Montreal-based manufacturer’s paper has also seen high levels of activity anchored on news of asset sale negotiations and a new contract.

On the heels of receiving the approval of European Union anti-trust regulators for the company’s sale of its rail unit a French counterpart, buyer Alstom said it would take weak second-quarter earnings into consideration during the rest of negotiations.

On Wednesday, Bombardier and Japanese company Hitachi won a $940 million contract to build rail cars for a high-speed line in Spain.

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