Ferrellgas notes rise despite delisting warning; Bristow Group issues rise as merger delayed

By James McCandless

San Antonio, Jan. 11 – The end of the week in the distressed market saw disparate direction in a week dominated by energy.

Ferrellgas Partners LP’s notes were on the rise Friday despite the company having received a delisting warning from the New York Stock Exchange.

In the oil space, Bristow Group Inc.’s issues were better amid concern about the company’s delayed merger with Columbia Helicopters.

A drop in oil futures saw the same movement for California Resources Corp.’s paper while Weatherford International plc and Sanchez Energy Corp.’s notes improved.

Utilities name PG&E Corp.’s issues were mixed again, capping off a week of heavy volume stemming from bankruptcy concerns.

In retail, L Brands, Inc.’s paper was mixed a day after the company reported lukewarm holiday sales.

Sector peer PetSmart, Inc.’s notes were also mixed while Neiman Marcus Group, Inc.’s issues fell.

Ferrellgas rises

Ferrellgas’ notes ended Friday on the rise, traders said.

The 6¾% notes due 2022 picked up 2½ points to close at 85¾ bid. The 6¾% notes due 2023 gained ¾ point to close at 84 bid.

On Friday, the Overland Park, Kan.-based propane company received a delisting warning from the NYSE after trading at less than $1 per share in the last 30 trading days.

The notes have been under pressure in recent months after a series of financial troubles have cast doubts on the company.

Recently, the company halted quarterly cash distributions and saw the departure of its chief financial and operating officers.

During the last half of 2018, the company also made several acquisitions of other propane names.

“They might have to restructure sooner rather than later,” a trader said.

Bristow up

In the oil and gas space, Bristow’s issues gained, market sources said.

The 6¼% notes due 2022 rose 1 point to close at 46 bid.

The Houston-based offshore air services name has seen increased activity as the market increases scrutiny over its delayed acquisition of sector peer Columbia Helicopters.

The company originally announced the $560 million acquisition in November and expected close by the end of 2018, but later announced a delay due to market conditions.

A large investor sent a letter to Bristow’s chairman objecting to the proposed financing of the acquisition.

“Apparently they’re still working on it but not everyone’s on board,” a trader said. “There’s a lot of back and forth between management and various holders that are gumming up the works.”

Meanwhile, a decline in oil futures took bellwether distressed oil names with them.

Los Angeles-based independent oil and gas producer California Resources’ paper ended the session negative.

The 6% paper due 2024 traded down 2 points to close at 70 bid. The 8% paper due 2022 shaved off 1½ points to close at 80 bid.

Baar, Switzerland-based contract driller Weatherford’s notes saw a boost.

The 7¾% notes due 2021 added 3 points to close at 81¾ bid.

Houston-based producer Sanchez Energy’s issues also improved.

The 6 1/8% notes due 2023 picked up ¾ point to close at 22 bid.

At the end of the week, West Texas Intermediate crude oil futures for Feb. delivery lost $1.00 to close at $51.59 per barrel.

North Sea Brent crude futures finished Friday at $60.48 after falling $1.20.

“I think what’s important right now is oil is above 50,” a trader said. “The space feels safer.”

PG&E mixed

Elsewhere, PG&E’s paper was mixed, traders said.

The 6.05% paper due 2034 rose 1½ points to close at 88 bid. The 3½% paper due 2020 gained 1 point to close at 89¾ bid. The 3¾% paper due 2024 shaved off 2½ points to close at 83½ bid.

The three tranches combined for $189 million of the bonds on the tape.

The San Francisco-based electric utility name spent the week dominating volume in the distressed space after the company warned of a potentially large accounting charge in the first quarter after California wildfires.

The warning sparked concerns about a potential bankruptcy filing.

During the week, the company received downgrades from Moody’s Investors Service and S&P Global Ratings, giving it junk status.

“The outcomes aren’t too clear on this,” a trader said. “But everyone’s latched onto it. It’s a huge structure so everyone can get a piece.”

L Brands mixed

In the retail sector, L Brands’ notes were also mixed, market sources said.

The 5¼% notes due 2028 gained ¼ point to close at 87¾ bid. The 6¾% notes due 2036 fell ¼ point to close at 85½ bid.

The Columbus, Ohio-based retailer reported a 1.6% decline in the 2018 holiday sales when compared to the same shopping period in 2017, posting $2.52 billion in sales.

Phoenix-based sector peer PetSmart’s issues were also mixed.

The 8 7/8% notes due 2025 shed ½ point to close at 63½ bid. The 5 7/8% notes due 2025 added ¼ point to close at 78½ bid.

Dallas-based luxury retailer Neiman Marcus’ paper fell.

The 8% paper due 2021 dropped 1½ points to close at 42½ bid.

© 2015 Prospect News.
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