Tupperware notes weaker after lawsuit news; American Airlines eyed in travel space

By James McCandless

San Antonio, Aug. 3 – The distressed debt space started the week with an emphasis on marketing and travel names.

Tupperware Brands Corp.’s notes weakened after news broke that a lawsuit was being filed against the name for potential fraud.

Meanwhile, American Airlines Group Inc.’s issues varied in direction on the back of positive travel data.

Sector peer United Airlines Holdings, Inc.’s paper also diverged.

In the pharma space, Mallinckrodt plc’s notes saw mixed activity as the market anticipated its second-quarter earnings release.

Despite a rise in oil futures, Occidental Petroleum Corp.’s issues differed in direction while Whiting Petroleum Corp.’s and SM Energy Co.’s paper was under pressure.

Elsewhere, manufacturing name Bombardier Inc.’s notes backed off of recent gains made on news that its asset sale was approved.

Steel producer United States Steel Corp.’s issues moved along separate tracks.

Tupperware weaker

Tupperware’s notes weakened at the beginning of the week, traders said.

The 4¾% senior notes due 2021 lost ½ point to close at 91½ bid.

After the close on Friday, a law firm announced that it was investigating disclosure statements released by the Orlando, Fla.-based housewares marketer released in March about potential fraud in its operations.

“That might be what is driving down the structure today,” a trader said. “They are already under some pressure to alleviate its maturities wall.”

In its recent second-quarter earnings releases, the company reported earnings per share of 84 cents and revenues of $397.4 million, surpassing analyst predictions.

At the same time, the company issued a going-concern warning as it conducts talks with outside advisers on how to handle its debt profile.

Airlines trade mixed

Meanwhile, air carrier American Airlines’ issues varied in direction, market sources said.

The 5% senior notes due 2022 gained 1 point to close at 58 bid. The 3¾% senior notes due 2025 declined by 1½ points to close at 45½ bid.

On Monday, the airline sector, including the Fort Worth-based airline, saw a positive trend after the government released data showing an increase in the average number of travelers.

The U.S. Transportation Security Administration reported that the daily average of travelers moving through TSA checkpoints last week was 686,360.

The number is an increase from 660,931 and 664,022 from the previous two weeks, respectively.

In April, a low of 97,799 was reached.

Last week, the company saw analysts weighing in on the company’s recovery in the short term, painting an uneven picture of its revenue potential through the end of the year into 2021.

Chicago-based sector peer United Airlines’ paper also diverged in direction.

The 5% senior notes due 2024 tacked on ¼ point to close at 83¾ bid. The 4¼% senior notes due 2022 shaved off ¼ point to close at 89 bid.

Mallinckrodt mixed

In the pharmaceutical space, Mallinckrodt’s notes saw mixed activity, traders said.

The 5¾% senior notes due 2022 added ¼ point to close at 17½ bid. The 5½% senior notes due 2025 dipped 1¼ points to close at 16¼ bid.

About $10 million of the 5¾% notes were on the tape.

The Staines-upon-Thames, England-based drug producer’s structure has seen heightened attention since July 24, when Franklin Advisors sold a $500 million stake before an expected July 30 coupon payment.

Mallinckrodt is expected to announce second-quarter earnings on Aug. 4.

Oil futures rise

Despite a rise in oil futures, distressed energy tranches moved on different paths, market sources said.

West Texas Intermediate crude oil futures for September delivery moved up 74 cents to close at $41.01 per barrel.

North Sea Brent crude oil futures for October delivery finished at $44.15 per barrel after a 63 cent boost.

Houston-based independent oil and gas producer Occidental Petroleum’s issues differed in direction.

The 2.9% senior notes due 2024 dipped ½ point to close at 94 bid. The 2.7% senior notes due 2022 held level at 96¾ bid.

Denver-based producer Whiting Petroleum’s paper was under pressure.

The 6 5/8% senior notes due 2023 gave back ½ point to close at 17¾ bid.

SM Energy, another Denver-based E&P, saw its notes get pushed lower.

The 6 5/8% senior notes due 2027 lost ¼ point to close at 50 bid. The 6¾% senior notes due 2026 fell ¼ point to close at 50 bid.

Bombardier off

Elsewhere, manufacturing name Bombardier’s issues backed off of recent gains, traders said.

The 5¾% senior notes due 2022 declined by 1¾ points to close at 93½ bid. The 7 7/8% senior notes due 2027 slipped 1 point to close at 79 bid.

News broke on Friday that European regulators have approved the Montreal-based manufacturer’s $7.4 billion asset sale.

The company reached a deal to sell its rail unit to Alstom in February.

The deal is expected to close in the first half of 2021.

U.S. Steel drifts

U.S. Steel’s paper moved along separate tracks, market sources said.

The 6 7/8% senior notes due 2025 closed level at 70¾ bid. The 6¼% senior paper due 2026 edged ¾ point lower to close at 66¾ bid.

Late last week, the Pittsburgh-based steelmaker reported second-quarter earnings results, showing an uneven picture.

The company showed a loss per share of $2.67 and revenues of $2.09 billion.

Also, the name noted that sales fell 41% year over year for the quarter and are down 31% overall in the year to date.

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