United Airlines notes in focus amid negative headlines; Frontier down in telecom space

By James McCandless

San Antonio, Nov. 20 – Wrapping up the week in the distressed market, the attention remained on the travel space.

United Airlines Holdings, Inc.’s notes varied in secondary trading as the federal government discourages holiday travel.

Sector peer American Airlines Group Inc.’s issues gained.

In the telecom space, Frontier Communications Corp.’s paper was pushed lower after bringing new issuance to market.

Cloud networking name Intelsat SA’s notes diverged in direction.

Meanwhile, oil and gas producer Occidental Petroleum Corp.’s issues drifted apart after receiving an analyst upgrade.

With oil futures rising as the backdrop, Transocean Ltd.’s paper also improved while Callon Petroleum Co.’s notes were pulled apart and Antero Resources Corp.’s issues fell.

Retailer L Brands, Inc.’s paper was mixed in trading.

Airlines in focus

United Airlines’ notes varied at the end of the week, traders said.

The 5% senior notes due 2024 moved up ¼ point to close at 96¾ bid. The 4¼% senior notes due 2022 shaved off ¾ point to close at 98¼ bid.

The Chicago-based air carrier’s structure remained in focus as the week concluded as the federal government issued new coronavirus-related warnings concerning travel.

The Centers for Disease Control and Prevention said on Thursday that Americans should consider not traveling for the Thanksgiving holiday to see relatives outside of their households.

Also on Thursday, United Airlines said that flight cancellations are expected to rise during the short-term.

United Airlines said it expects total revenue to be down by about 67% for fourth-quarter 2020 as compared to the same period in 2019.

Fort Worth-based sector peer American Airlines’ issues gained.

The 5% senior notes due 2022 rose ¼ point to close at 78 bid.

Frontier trades lower

In the telecom space, Frontier Communications’ paper was pushed lower, market sources said.

The 10½% senior notes due 2022 lost ¾ point to close at 47¼ bid. The 11% senior notes due 2025 dipped ¼ point to close at 47 bid.

After the close on Thursday, the Norwalk, Conn.-based wireline communications provider priced a downsized $2.55 billion of secured notes in a two-part drive-by, Prospect News reported.

The deal included a downsized $1.55 billion tranche of 7.5-year DIP-to-exit first-lien notes that priced at par to yield 5%.

The deal size decreased from $1.8 billion.

With the proceeds from the deal, the company plans to repay all its outstanding borrowings under a pre-petition term loan B-1 facility due 2024 and repurchase all its existing pre-petition 8½% second-lien secured notes due 2026.

Concurrently, the company upsized its fungible add-on DIP-to-exit term loan to $750 million from $500 million.

Luxembourg-based satellite operator Intelsat’s notes diverged in direction.

Intelsat Jackson Holdings SA’s 5½% senior notes due 2023 held level to close at 65½ bid. Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 slipped ½ point to close at 3¾ bid.

Occidental drifts apart

Meanwhile, oil and gas producer Occidental Petroleum’s issues drifted apart, traders said.

The 2.9% senior notes due 2024 gave up 1½ points to close at 91¼ bid. The 2.7% senior notes due 2022 closed level at 98 bid.

Before the market opened on Friday, the Houston-based independent oil and gas producer received an analyst upgrade from Susquehanna.

In a note, an analyst said that now is a good time to invest in the company, citing confidence in the recovery of oil prices.

By the end of 2021 and moving into 2022, the analyst thinks that crude oil will rise above $50 per barrel.

On Thursday, the company saw a ratings downgrade from S&P Global Ratings.

The agency cut the company’s issuer credit rating and unsecured issue-level ratings and maintained a negative outlook.

Oil names differ

With oil futures rising in the backdrop, distressed energy tranches moved on various tracks, market sources said.

West Texas Intermediate crude oil futures for January delivery reached up 52 cents to close at $42.42 per barrel.

North Sea Brent crude oil futures for January delivery finished at $44.96 per barrel after a 76 cent pickup.

Steinhausen, Switzerland-based contract driller Transocean’s paper also improved.

The 7½% senior notes due 2031 picked up 3 points to close at 21½ bid. The 6.8% senior paper due 2038 garnered 2¾ points to close at 20¾ bid.

Houston-based producer Callon Petroleum’s notes were pulled apart.

The 6 1/8% senior notes due 2024 inched up ¼ point to close at 38¾ bid. The 6 3/8% senior notes due 2026 shed ½ point to close at 30½ bid.

Denver-based E&P company Antero Resources’ issues fell.

The 5 5/8% senior notes due 2023 were docked 2 points to close at 86¼ bid. The 5% senior notes due 2025 slipped ½ point to close at 76 bid.

L Brands eyed

Retailer L Brands’ paper moved along different paths, traders said.

The 6¾% senior notes due 2036 added ¼ point to close at 107 bid. The 5¼% senior paper due 2028 edged ¾ point lower to close at 102¼ bid.

This week, the Columbus, Ohio-based company reported better-than-expected earnings for the third quarter.

The company showed a per share profit of $1.13 and revenues of $3.06 billion, both exceeding analyst expectations.

© 2015 Prospect News.
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