Distressed energy bonds mixed; NGL gains, Transocean softens; AMC, WeWork improve

By Cristal Cody

Tupelo, Miss., Jan. 20 – Energy distressed bonds were mixed in trading over Wednesday’s session as the new U.S. presidential administration was sworn in.

NGL Energy Partners LP’s 7½% notes due 2023 (B3/CCC+) traded up over 2 points at 82 bid in light volume, a source said.

SESI, LLC’s 7¾% notes due 2024 recovered 3 points in trading on Wednesday to 36½ bid, a source said.

The notes had added ½ point on Tuesday after giving back 3 points on Friday.

SESI is a subsidiary of Superior Energy Services Inc., which filed for Chapter 11 bankruptcy in December.

Meanwhile, offshore driller Transocean Inc.’s distressed bonds were softer over the day, a source said.

The company’s 11½% senior notes due 2027 (Caa3/CCC-) fell more than 1½ points to 81 bid.

Transocean’s 8% bonds due 2027 (Ca) declined 1 point to 54¼ bid.

Oil futures ticked higher over the day.

North Sea Brent crude oil futures for March deliveries added 18 cents to settle at $56.08 a barrel.

West Texas intermediate crude oil for February delivery rose 26 cents to settle at $53.24 a barrel.

Market tone was positive as Joe Biden was sworn in under heavy security as the new president of the United States.

Stocks were all up with the S&P 500 index 1.39% better and the Nasdaq 1.97% higher.

The iShares iBoxx High Yield Corporate Bond ETF closed up 16 cents, or 0.18%, at $87.52.

The S&P U.S. High Yield Corporate Distressed Bond index rose 0.75% on Tuesday to give a month- and year-to-date total return of 6.34%.

Chesapeake Energy mixed

Chesapeake Energy Corp.’s paper was mixed in secondary trading as the company moves forward toward exiting bankruptcy, market sources said.

The 8% senior notes due 2027 improved about ¼ point to 5¼ bid on Wednesday, a source said.

Chesapeake Energy’s 11½% senior secured second-lien notes due 2025 rallied on Tuesday climbing to as high as 37 bid in strong trading but softened to 30¾ bid on Wednesday.

Chesapeake Energy’s plan to exit bankruptcy was approved a week ago with the company expected to eliminate about $7 billion of debt under the reorganization.

The Chapter 11 bankruptcy case was filed on June 28 before the U.S. Bankruptcy Court for the Southern District of Texas.

Chesapeake Energy filed the order with the Securities and Exchange Commission on Tuesday confirming the fifth amended joint Chapter 11 plan of reorganization of the company and its debtor affiliates.

The company reported total assets of $6.9 billion and total liabilities of $11.8 billion as of Nov. 30.

Active names

AMC Entertainment Holdings, Inc.’s bonds remained strong on Wednesday following the company’s announcement that it issued $100 million of guaranteed first-lien secured notes due 2026 on Friday.

The company’s 10½% first-lien senior secured notes due 2025 (Caa2/CCC), which climbed 1 point to 83½ bid on Tuesday, jumped 4½ points to 88 bid during the session, a source said.

In other distressed trading, WeWork Cos. Inc.’s bonds have been active over the past couple of sessions, a market source reported.

The flexible office share company’s 7 7/8% notes due 2025 (CCC+) improved 2 points to 75¼ bid over the day after trading up 2½ points on Tuesday.

Also on Wednesday, Envision Healthcare Corp.’s 8¾% senior notes due 2026 (Ca/CC) rallied 2 points to 68½ bid in secondary trading, a source said.

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