Bombardier notes gain on regulatory news; American Airlines lower in travel space

By James McCandless

San Antonio, July 27 – As a new week opened up in the distressed debt market, the focus shifted to manufacturing and travel names.

Bombardier Inc.’s notes gained ground amid reports that European regulators will approve the company’s sale of its rail segment.

The 7 7/8% senior notes due 2027 gained ½ point to close at 75½ bid. The 8¾% senior notes due 2021 improved by ¾ point to close at 96¾ bid.

On Monday, reports indicated that E.U. regulators are set to approve the Montreal-based manufacturer’s sale of its rail division to Alstom.

The $8.2 billion deal was reached in February.

In the travel space, American Airlines Group Inc.’s issues were pushed lower despite receiving an analyst upgrade.

The 5% senior notes due 2022 shaved off ½ point to close at 59¾ bid. The 3¾% senior notes due 2025 gave up 1½ points to close at 45½ bid.

The Fort Worth, Tex.-based air carrier’s issues were under water despite early Monday news that an analyst at Raymond James raised the company’s rating.

In a note, the analyst said that a recent stock sell-off has begot a more balanced risk-reward scenario and that Chapter 11 bankruptcy would not be needed unless the recovery stalls over multiple years.

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