Neiman Marcus notes rise amid continuing creditor spat; Weatherford issues rise after rig sale

By James McCandless

San Antonio, Dec. 3 – At the start of the week in distressed trading, volume was moderate ahead of the Wednesday market closure due to the national day of mourning for President George H.W. Bush.

Neiman Marcus Group Inc.’s notes were gaining amid a tussle with the company’s creditors over a restructuring agreement.

Elsewhere in the sector, L Brands, Inc.’s and PetSmart, Inc.’s issues were also positive.

In energy, Weatherford International plc’s paper improved after news broke that it completed the $92.5 million sale of 11 oil rigs in Saudi Arabia.

On a positive day for oil futures, California Resources Corp.’s and Denbury Resources Inc.’s notes were mixed while Sanchez Energy Corp.’s issues fell.

Away from oil, Ferrellgas Partners, LP’s paper was also mixed amid continuing market scrutiny.

Hexion Inc.’s notes saw a boost.

Neiman Marcus higher

Neiman Marcus’ notes were gaining Monday, traders said.

The 8% notes due 2021 picked up 3 points to close at 53 bid. The 9½% notes due 2021 rose 3½ points to close at 53½ bid.

On Monday, Marble Ridge Capital, a major creditor to the Dallas-based luxury retail chain, sent a letter to the company claiming that the anticipated transfer of e-commerce arm MyTheresa would not allow creditors to use the asset as collateral.

Last week, news broke that restructuring talks with creditors had stalled as the company seeks to alter its capital structure before $2.8 billion in debt matures in two years.

The company’s notes have been trading lower amid the talks.

“They have a lot of time to figure something out,” a trader said. “It’s just a bit of a tug of war right now.”

Elsewhere in retail, Columbus, Ohio-based sector peer L Brands’ issues were also improving.

The 6 7/8% notes due 2035 added 1 point to close at 86½ bid. The 5¼% notes due 2028 edged up ¼ point to close at 89 bid.

Phoenix-based pet supplies retailer PetSmart’s 5 7/8% paper due 2025 rose ½ point to close at 77 bid.

Weatherford up

Weatherford’s notes also saw positive movement, market sources said.

The 8¼% notes due 2023 jumped 3 points to close at 69½ bid. The 9 7/8% notes due 2024 also gained 3 points to close at 70 bid.

The Baar, Switzerland-based oilfield services name announced early Monday that it had completed a $92.5 million sale of 11 drilling rigs in Saudi Arabia to ADES International Holding Ltd.

The company’s notes have been under pressure recently as one of the distressed space’s main targets during a recent run of declines in oil futures.

Meanwhile, in other oil trading, trading was largely mixed.

At the forefront, Los Angeles-based independent oil and gas producer California Resources’ issues were mixed.

The 6% notes due 2024 fell 1 point to close at 74 bid. The 8% notes due 2022, considered a bellwether of the distressed oil space, picked up ½ point to close at 78½ bid.

Plano, Texas-based producer Denbury Resources’ paper was also mixed.

The 6 3/8% paper due 2021 rose 2½ points to close at 88½ bid. The 5½% paper due 2022 shaved off ¾ point to close at 76½ bid.

Houston-based peer Sanchez Energy’s 6 1/8% notes due 2023 lost 1¼ points to close at 25¼ bid.

“I would expect a lot of those gains to be given back by the end of the week, if not sooner,” a trader said.

West Texas Intermediate crude oil futures rose $2.02 to close at $52.95 per barrel in Monday’s session. North Sea Brent crude finished the day at $58.61 after losing 2 cents.

Ferrellgas mixed

Ferrellgas’ issues were mixed, traders said.

The 6¾% notes due 2022 lost 1 point to close at 83½ bid. The 6¾% notes due 2023 added 1 point to close at 85 bid.

The Overland Park, Kan.-based propane name is working to maintain investor confidence after a series of negative headlines.

Among the company’s recent announcements were the reduction of its dividend, the suspension of quarterly cash distributions, and the departure of its chief financial officer and chief operating officer.

“Their equity is getting destroyed but the bond side seems to be faring better,” a trader said.

Hexion gains

Hexion’s paper saw a boost, market sources said.

The 9% paper due 2020 rose 3¾ points to close at 50¾ bid.

The Columbus, Ohio-based specialty chemical manufacturer’s notes have trended lower of late after doubts were raised by second-lien holders that it could recoup enough value when $2.4 billion in notes come due in 2020.

“That situation’s been kind of quiet for now,” a trader said. “But that doesn’t stop Hexion from being active every day.”

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