Whiting notes improve as company exits bankruptcy; Intelsat in focus in telecom space

By James McCandless

San Antonio, Sept. 1 – At the end of the Tuesday session, the distressed market zeroed in on the energy and telecom spaces.

Whiting Petroleum Corp.’s notes gained ground after the company announced that it had completed its restructuring and exited bankruptcy.

Despite a rise in oil futures, Occidental Petroleum Corp.’s issues varied while Antero Resources Corp.’s and Transocean Ltd.’s paper fell.

Meanwhile, in telecom, Intelsat SA’s notes diverged as it tries to finance an acquisition with debtor-in-possession funds.

Wireline communicator Frontier Communications Corp.’s issues saw mixed activity after appointing a new executive chairman.

In the travel space, American Airlines Group Inc.’s and United Airlines Holdings, Inc.’s paper was carried higher after nixing booking change fees.

Theater chain AMC Entertainment Holdings, Inc.’s notes were mixed as the company pushes for more theater reopenings.

Whiting gains

Whiting Petroleum’s notes gained ground by the end of Tuesday, traders said.

The 6¼% senior notes due 2023 tacked on ¼ point to close at 24 bid. The 6 5/8% senior notes due 2026 rose ¼ point to close at 24 bid.

On Tuesday, the Denver-based independent oil and gas producer announced that it has completed its financial restructuring and emerged from Chapter 11 bankruptcy, Prospect News reported.

According to a news release, the company officially concluded its reorganization after completing all required actions and satisfying the remaining conditions to its plan of reorganization.

Whiting’s unsecured claims, including holders of its senior unsecured notes, received their share of 97% of the company’s newly issued common stock.

“They were one of the first casualties of the energy crash,” a trader said.

Whiting said that the process scrapped about $3 billion in debt.

The company filed for bankruptcy in April after the collapse of energy prices.

Oil names vary

Despite a rise in oil futures, distressed energy names saw a downward trend, market sources said.

West Texas Intermediate crude oil futures for October delivery shifted up 15 cents to settle at $42.76 per barrel.

North Sea Brent crude oil futures for November delivery ended at $45.58 per barrel after a 30 cent pickup.

Houston-based producer Occidental Petroleum’s issues varied in direction.

The 2.9% senior notes due 2024 held level to close at 92¼ bid. The 2.7% senior notes due 2022 dipped ¼ point to close at 98¼ bid.

Denver-based E&P Antero Resources’ paper fell.

The 5 1/8% senior notes due 2022 dived 7¼ points to close at 78¼ bid. The 5 5/8% senior notes due 2023 were docked 1 point to close at 78½ bid.

Steinhausen, Switzerland-based contract driller Transocean’s notes were also under water.

The 7½% senior notes due 2026 slipped 2¾ points to close at 29¼ bid. The 7½% senior notes due 2031 declined by 1½ points to close at 19¼ bid.

Intelsat diverges

Meanwhile, in the telecom space, Intelsat’s issues diverged, traders said.

The 9½% senior notes due 2023 chalked off 1½ points to close at 33 bid. Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 closed level at 4½ bid.

After the close on Tuesday, the Luxembourg-based satellite operator plans to draw down on its $1 billion in DIP financing to finance its acquisition of the commercial aviation business of Gogo Inc. for $400 million, Prospect News reported.

The company also plans to use cash on hand for the deal.

Stakeholders and the bankruptcy court have approved of the completion of the acquisition, which is expected to close before the end of the first quarter 2021.

Reports indicated that the name was exploring the asset purchase last week.

Frontier lifted

Wireline communicator Frontier Communications’ paper was lifted, market sources said.

The 10½% senior notes due 2022 gave up ½ point to close at 43 bid. The 11% senior notes due 2025 garnered 1 point to close at 44 bid.

Early Tuesday, the Norwalk, Conn.-based wireline telecom said it selected John Stratton to serve as executive chairman of the company’s board of directors upon its emergence from Chapter 11.

In a press release, the company said that it expects to emerge from bankruptcy with its total outstanding debt reduced by more than $10 billion.

Frontier Communications expects to exit bankruptcy in early 2021.

Airlines edge higher

In the travel space, American Airlines’ notes were carried higher, traders said.

The 5% senior notes due 2022 picked up ¼ point to close at 65¾ bid. The 11¾% senior notes due 2025 rose ½ point to close at 97¼ bid.

Late in the day on Monday, the Fort Worth-based air carrier announced that it would permanently remove its booking change fee, following in the footsteps of others in the sector.

Earlier in the month, the company announced that if a second round of federal payroll aid is not passed by October, up to 40,000 people could be laid off or furloughed.

Up to 19,000 of those jobs would be involuntary cuts.

Chicago-based sector peer United Airlines, which was the first to scrap the fee, saw its issues gain.

The 5% senior notes due 2024 gained 1 point to close at 91½ bid. The 4¼% senior notes due 2022 moved up ½ point to close at 92 bid.

AMC eyes reopenings

Theater chain AMC’s paper differed, market sources said.

The 12% notes due 2026 shaved off ¾ point to close at 37 bid. The 6 1/8% senior notes due 2027 tacked on 1 point to close at 33½ bid.

During the Tuesday session, the Leawood, Kan.-based movie theater operator announced that it expects to open 140 locations by Thursday.

After those locations have opened, about 70% of its theaters will be operational.

The company has been preparing to open its theaters throughout August after the coronavirus forced many retail locations to shutter.

On Monday, news broke that the company sold nine theaters in Latvia, Lithuania and Estonia to UP Invest for $77 million.

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