United Airlines notes in focus on more flight news; Nordstrom lower after ratings cut

By James McCandless

San Antonio, Sept. 4 – Distressed debt trading was fixed on travel and retail names on Friday.

United Airlines Holdings, Inc.’s notes varied after the company announced that it would gradually increase its flight capacity in October.

Sector peer American Airlines Group Inc.’s issues also moved to lower levels.

Elsewhere, in retail, Nordstrom, Inc.’s paper dropped after receiving a ratings downgrade on Thursday.

Department store chain L Brands, Inc.’s notes yielded mixed results.

In the oil and gas space, Denbury Resources Inc.’s issues gained after the company’s plan of reorganization was approved.

As oil futures were under pressure, Occidental Petroleum Corp.’s and Antero Resources Corp.’s paper dipped as Valaris plc’s notes rose.

Movie theater operator AMC Entertainment Holdings, Inc.’s issues drifted apart.

Airlines eyed

United Airlines’ notes varied as the session closed, traders said.

The 5% senior notes due 2024 fell ¾ point to close at 90¼ bid. The 4¼% senior notes due 2022 added ½ point to close at 94½ bid.

On Friday morning, the Chicago-based air carrier announced that ramp up of its domestic and international flight schedules in October.

The company will fly 40% of its full schedule, which represents an expected 6% increase from what it expects from September.

As the flights get back on track, the airline plans to resume services on 50 domestic routes and 23 international routes.

On Wednesday, United said that it would furlough more than 16,000 workers if federal payroll aid is not given a second round of funding by Congress.

Earlier in the week, in an effort to spark more demand for travel, the company terminated its $200 booking change fee, leading other airlines to make the same move.

“It’s going to be a balancing act for months,” a trader said. “I think the industry’s bonds are going to be volatile going into 2021.”

Fort Worth-based sector peer American Airlines’ issues moved on different paths.

The 5% senior notes due 2022 shaved off ¼ point to close at 65½ bid. The 11¾% senior notes due 2025 were docked 1 point to close at 98½ bid.

Nordstrom lower

Elsewhere, in retail, Nordstrom’s paper dropped, market sources said.

The 5% senior notes due 2044 fell 1¾ points to close at 70¼ bid. The 4 3/8% senior paper due 2030 gave up 2¼ points to close at 81 bid.

The Seattle-based retailer’s structure saw negative attention after receiving a ratings downgrade from S&P Global Ratings.

The agency lowered the senior unsecured notes to BB+ from BBB- and assigned a 4 recovery rating.

In S&P’s view, the company’s long-term competitive position has been reduced amid ongoing secular pressures, including the coronavirus pandemic.

Despite this, the agency says that the company has differentiated itself by heavily investing in digital and supply chain capabilities.

Columbus, Ohio-based department store chain’s notes yielded mixed results.

The 6¾% senior notes due 2036 shed ¼ point to close at 101½ bid. The 5¼% senior notes due 2028 picked up ½ point to close at 95½ bid.

Denbury gains

In the oil and gas space, Denbury’s issues gained, traders said.

The 7¾% notes due 2024 tacked on 1 point to close at 52 bid.

On Wednesday, the Plano, Tex.-based independent oil and gas producer’s pre-packaged plan of reorganization was confirmed in bankruptcy court, Prospect News reported.

As previously reported, Denbury reached an agreement with holders of 100% of revolving credit facility loans, 67.2% of second-lien notes and 70.8% of convertible notes for a pre-packaged Chapter 11 plan that will eliminate $2.1 billion of bonds.

Under terms of the plan, general unsecured claims will be paid in full in the ordinary course.

Oil under pressure

As oil futures were under pressure to end the week, distressed energy names trended similarly, market sources said.

West Texas Intermediate crude oil futures for October delivery gave up $1.60 to cap the week at $39.77 per barrel.

North Sea Brent crude oil futures for November delivery finished at $42.66 per barrel after a $1.41 drop.

Houston-based producer Occidental Petroleum’s paper dipped.

The 2.9% senior notes due 2024 chalked off ¾ point to close at 91 bid. The 2.7% senior notes due 2022 were pushed down ¾ point to close at 98¼ bid.

Denver-based E&P Antero Resources’ notes followed the sector trend.

The 5 1/8% senior notes due 2022 moved down 1½ points to close at 84¾ bid.

London-based contract driller Valaris’ issues saw positivity.

The 5.2% senior notes due 2025 inched up ¼ point to close at 7½ bid.

AMC mixed

Meanwhile, movie theater operator AMC’s paper drifted apart, traders said.

The 12% notes due 2026 rose 1¼ points to close at 42 bid. The 10½% paper due 2025 slid 1 point to close at 91 bid.

The Leawood, Kan.-based move theater chain’s structure was in focus this week as the company reopens its locations across the country.

On Thursday, the company reopened 70% of its movie theaters after a prolonged closure due to the pandemic.

AMC has opened 140 locations.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.