Hertz notes eyed after CFO change; Whiting rises as restructuring approved by court

By James McCandless

San Antonio, Aug. 17 – The distressed debt market was fixed on travel and energy names on Monday.

Hertz Global Holdings, Inc.’s notes diverged in direction after announcing a change to its chief financial officer position.

In the energy space, Whiting Petroleum Corp.’s issues rose as its plan for reorganization was approved in bankruptcy court.

While oil futures opened the week gaining, Valaris plc’s paper followed while Occidental Petroleum Corp.’s notes varied and SM Energy Co.’s issues dipped.

Meanwhile, United Airlines Holdings, Inc.’s paper fell as coronavirus concerns outweighed new travel demand.

Sector peer American Airlines Group Inc.’s notes finished mixed.

Elsewhere, in retail, Revlon, Inc.’s issues saw negativity amid a pair of disputes involving its lenders.

Department store name L Brands, Inc.’s paper was carried higher.

Hertz flat to lower

Hertz’s notes diverged in direction by the end of the session, traders said.

The 6¼% senior notes due 2022 held level to close at 35¾ bid. The 5½% senior notes due 2024 shaved off ¼ point to close at 35¾ bid.

After the close on Friday, the Estero, Fla.-based vehicle rental company announced that CFO Jamere Jackson has resigned from the position.

The resignation is effective on Sept. 11, when he will be replaced with chief accounting officer Eric Esper.

Whiting rises

In the energy space, Whiting Petroleum’s issues were seen rising, market sources said.

The 6¼% senior notes due 2023 grabbed ¼ point to close at 19¼ bid. The 6 5/8% senior notes due 2026 rose ¼ point to close at 19¾ bid.

On Monday, the Denver-based independent oil and gas producer’s plan of reorganization was confirmed in bankruptcy court, Prospect News reported.

As previously reported, the company entered into a restructuring support agreement with some holders of its 1.25% convertible senior notes due 2020, 5¾% senior notes due 2021, 6¼% senior notes due 2023 and the 2026 notes.

The company said that the plan will strengthen its balance sheet, reduce debt and improve liquidity.

Last week, Whiting announced that chief executive officer and chairman of the board Bradley Holly would resign from his posts after making its exit from bankruptcy.

Energy executive Lynn Peterson will replace him as board member Kevin McCarthy will become chairman.

Emergence from the process is expected on Sept. 1.

Oil gains

As oil futures kicked off the week making gains, distressed energy names moved along different tracks, traders said.

West Texas Intermediate crude oil futures for September delivery picked up 88 cents to settle at $42.89 per barrel.

North Sea Brent crude oil futures for October delivery ended at $45.37 per barrel after a 57 cent add-on.

London-based contract driller Valaris’ paper followed oil futures.

The 5.2% senior notes due 2025 improved by 2 points to close at 5 bid.

Houston-based producer Occidental Petroleum’s notes varied.

The 2.9% senior notes due 2024 rose ¼ point to close at 90¾ bid. The 2.7% senior notes due 2022 shed ¼ point to close at 96¾ bid.

Denver-based E&P SM Energy’s issues dipped.

The 6¾% senior notes due 2026 declined 1½ points to close at 50 bid.

Airlines active

Meanwhile, United Airlines’ paper fell at the end of the afternoon, market sources said.

The 5% senior notes due 2024 were docked ¾ point to close at 88½ bid. The 4¼% senior notes due 2022 declined by 1 point to close at 90¼ bid.

The airline space, including the Chicago-based air traveler’s structure, received heightened attention as fresh concerns over the coronavirus gripped the market.

After a recent uptick in travelers going through airports in recent weeks, demand was overshadowed by rising Covid-19 cases throughout the country.

Ratings agencies and analysts have warned that the sector will have a slow recovery heading into 2021, with furloughs expected.

Fort Worth-based sector peer American Airlines’ notes yielded mixed results.

The 5% senior notes due 2022 reached up 1½ points to close at 66 bid. The 3¾ senior notes due 2025 dived 4¼ points to close at 48½ bid.

Revlon notes lower

Elsewhere, in retail, Revlon’s issues skewed negative, traders said.

The 5¾% senior notes due 2021 were pushed down 1 point to close at 21 bid.

Late last week, a pair of disputes arose surrounding lenders for the New York-based cosmetics producer.

In the first dispute, UMB Bank filed a lawsuit against the company for alleged intellectual property theft.

The lender accused Revlon of improperly transferring $1.8 billion in intellectual property rights, petitioning for a court to return the collateral.

On Friday, reports indicated that Citigroup is working to recover $900 million in payouts to lenders, which it blamed on a clerical error.

Columbus, Ohio-based department store name L Brands’ paper was carried higher.

The 6¾% senior notes due 2036 garnered 2¼ points to close at 96¾ bid. The 5¼% senior paper due 2028 rose 1 point to close at 90 bid.

© 2015 Prospect News.
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