Gulfport notes rise after bankruptcy filing; Cinemark improves in entertainment space

By James McCandless

San Antonio, Nov. 16 – As a new week opened up in the distressed debt space, energy and entertainment names took the focus.

Gulfport Energy Corp.’s notes strengthened after the company filed for bankruptcy to implement a reorganization plan.

In the energy sector, Occidental Petroleum Corp.’s and SM Energy Co.’s issues improved while Antero Resources Corp.’s paper varied.

Elsewhere, Cinemark Holdings, Inc.’s notes gained ground as the company reached a theatrical window agreement and was also swept up by news of another potential vaccine for Covid-19.

Sector peer AMC Entertainment Holdings, Inc.’s issues followed the positive trend.

In the travel space, American Airlines Group Inc.’s and United Airlines Holdings, Inc.’s notes were also carried upward by news of a potential vaccine.

Meanwhile, automotive parts maker Tenneco Inc.’s notes improved after pricing a $500 million nine-year issue of senior secured notes.

Gulfport trades higher

Gulfport Energy’s notes saw a rise to open up the week, traders said.

The 6 5/8% senior notes due 2023 added 2¾ points to close at 57¾ bid. The 6% senior notes due 2024 tacked on ¼ point to close at 57¾ bid.

On Monday morning, the Oklahoma City-based independent oil and gas producer filed for Chapter 11 bankruptcy to implement a pre-arranged plan of reorganization, Prospect News reported.

The company entered into a restructuring agreement with more than 95% of its revolving credit facility lenders and noteholders holding over two-thirds of the outstanding principal amount of its senior unsecured notes.

As part of the plan, the company intends to eliminate $1.25 billion in funded debt and significantly reduce annual cash interest expense going forward.

Concurrently, Gulfport will also issue $550 million of new senior notes under the plan to existing unsecured creditors of its subsidiaries.

Debtor-in-possession financing has been secured to the tune of $262.5 million from existing lenders under its revolver, the company said.

Oil names up

Improving oil futures saw their movements mostly matched by distressed energy tranches, market sources said.

West Texas Intermediate crude oil futures for December delivery reached up $1.21 to settle at $41.34 per barrel.

North Sea Brent crude oil futures for January delivery capped the session at $43.82 per barrel after a $1.04 pickup.

Houston-based producer Occidental Petroleum’s issues were lifted.

The 2.9% senior notes due 2024 rose 1¼ points to close at 91½ bid. The 2.7% senior notes due 2022 garnered ¼ point to close at 96¾ bid.

Denver-based E&P company SM Energy’s paper moved along the same upward track.

The 5% senior notes due 2024 shot up 4¾ points to close at 60¼ bid. The 6 5/8% senior paper due 2027 gained 2½ points to close at 46 bid.

Antero Resources, another Denver-based peer, saw its notes vary.

The 5 1/8% senior notes due 2022 shifted up ¾ point to close at 92¾ bid. The 5 5/8% senior notes due 2023 shaved off ¾ point to close at 89 bid.

Cinemark gains

Elsewhere, movie theater chain Cinemark’s issues gained ground, traders said.

Early Monday, news broke that the Plano, Tex.-based movie theater operator had reached a theater window agreement with Universal Pictures.

The agreement between the two parties outlines the studio’s ability to release films on digital platforms as soon as 17 days after theater debuts.

The window represents three weekends in which films would be held in theaters.

Movies that have $50 million or more in opening weekends at the box office would remain exclusively in theaters for 31 days.

“This won’t make a difference now since there isn’t anything new to show,” a trader said.

The company was also buoyed by news that biotechnology firm Moderna announced that its candidate for a coronavirus vaccine had a 94.5% efficacy rate in recent trials.

Moderna expects to have 20 million doses of a vaccine ready by the end of the year.

Leawood, Kan.-based sector peer AMC’s paper followed the positive trend.

The 10½% paper due 2025 moved up 3¼ points to close at 72½ bid. The 12% notes due 2026 grabbed 2¾ points to close at 17 bid.

Airlines better

In the travel space, American Airlines’ notes were carried upward, market sources said.

The 5% senior notes due 2022 rose 2 points to close at 78¾ bid. The 11¾% senior notes due 2025 tacked on 1½ points to close at 107¼ bid.

The Fort Worth-based air carrier’s structure also saw positive attention after the reports of another potential vaccine hit the market.

Recent releases from Moderna and Pfizer about the high efficacy rates of vaccine candidates have provided boosts to travel names that have been hampered by the coronavirus pandemic.

Last week, the company announced an offering of 38.5 million shares of common stock at $13.00 per share in an effort to boost its liquidity in the absence of new government stimulus.

Chicago-based air travel name United Airlines’ issues also pushed higher.

The 5% senior notes due 2024 grabbed 1½ points to close at 96½ bid. The 4¼% senior notes due 2022 added 1¾ points to close at 98 bid.

Tenneco improves

Meanwhile, automotive parts maker Tenneco’s paper improved, traders said.

The 5% senior notes due 2026 picked up 2½ points to close at 85¼ bid.

At the end of last week, the Lake Forest, Ill.-based automotive name priced a $500 million issue of senior secured notes due Jan. 15, 2029 at par with a 7 7/8% yield.

With cash on hand and the proceeds of this deal, the company intends to redeem all of its outstanding secured notes due 2022.

The company concurrently announced that it would redeem the €415 million of its outstanding 4 7/8% senior secured notes due 2022 in full on Dec. 14.

The redemption price is 101.21875 plus accrued interest to but excluding the redemption date, equal to €1,020.1771 per €1,000 principal amount.

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