Scientific Games notes rise after stake sale news; Revlon eyed as tender offer expires

By James McCandless

San Antonio, Sept. 14 – At the opening of the new week, the distressed debt space saw focus on newsmakers in consumer-facing sectors.

Scientific Games Corp.’s notes were on the rise after news broke that a group of investors had agreed to buy a 34.9% stake in the name.

Elsewhere, in retail, Revlon, Inc.’s issues varied in direction after announcing the expiration of a private exchange offer.

Sector peer Nordstrom, Inc.’s paper also diverged.

Oil and gas producer Occidental Petroleum Corp.’s notes continued to see negative pressure in the wake of its tender offer results.

As oil futures weakened by the end of the session, Antero Resources Corp.’s, Valaris plc’s and Transocean Ltd.’s issues followed.

Meanwhile, American Airlines Group Inc.’s paper was carried higher on positive travel data while United Airlines Holdings, Inc.’s notes moved on different paths.

Scientific Games up

Scientific Games’ notes were on the rise in the Monday session, traders said.

The 7% senior notes due 2028 added 2¾ points to close at 99½ bid. The 7¼% senior notes due 2029 gained 2¾ points to close at 99½ bid.

About $12 million of the paper was on the tape.

During Monday’s activity, the Las Vegas-based gaming technology company announced that a group of investors featuring Caledonia Investments would purchase a 34.9% stake.

The deal includes the addition of three members to the board of directors.

The stake was purchased from MacAndrews & Forbes, which announced its intention to sell the holdings in July.

In a statement, Scientific Games said that it would focus on digital gaming and sports betting.

“There is a debt problem to solve and there may not be the demand for in-person betting, at least not at previous levels,” a trader said. “There had to be a shakeup at some point.”

Revlon, Nordstrom vary

Elsewhere, in the retail space, Revlon’s issues varied in direction, market sources said.

The 5¾% senior notes due 2021 improved by 1¼ points to close at 32 bid. The 6¼% senior notes due 2024 declined by 4½ points to close at 10½ bid.

On Monday, the New York-based cosmetics maker announced the expiration of subsidiary Revlon Consumer Products Corp.’s private exchange offer and consent solicitation for its 5¾% senior notes due 2021 for newly issued 5¾% senior notes due 2024, Prospect News reported.

As of 11:59 p.m. ET Sept. 11, $19,836,000 of the existing notes, or 5.1% of the amount of notes outstanding, had been validly tendered into the exchange offer.

Representing a failure to meet the condition of not having less than 95% tendered, the exchange offer has not been completed and Revlon has not accepted the existing notes tendered in the exchange offer.

The offer and consent bid started on July 27.

Seattle-based department store chain Nordstrom’s paper was flat to slightly higher.

The 7% senior notes due 2038 held level to close at 90½ bid. The 5% senior notes due 2044 gained ¼ point to close at 70¼ bid.

Occidental declines

Oil and gas name Occidental Petroleum’s notes continued to see negativity, traders said.

The 3½% senior notes due 2025 gave up 3½ points to close at 82¾ bid. The 7 7/8% senior notes due 2030 shed 2½ points to close at 105 bid.

Late Friday, after the close of activity, the Houston-based independent oil and gas producer reported the final results for an eight-series tender offer.

About $2.1 billion was accepted through the offer after an additional $95,000 principal amount of its 4.1% notes due 2021 were accepted after the early deadline and before the final deadline.

Before the expiration, the company modified the priority orders for the floating-rate August 2022 notes and 3 1/8% 2022 notes.

The offering started on Aug. 12.

An upsized $3 billion three-tranche offering of senior notes was sold to fund the exchange.

Oil weakens

As oil futures weakened by afternoon’s end, distressed energy names followed suit, market sources said.

West Texas Intermediate crude oil futures for October delivery shaved off 7 cents to settle at $37.26 per barrel.

North Sea Brent crude oil futures for November delivery closed at $39.61 per barrel after a 22 cent dip.

Denver-based producer Antero Resources’ issues joined futures on the downward track.

The 5 5/8% senior notes due 2023 fell 2¾ points to close at 75½ bid. The 5% senior notes due 2025 lost 3¾ points to close at 66 bid.

London-based contract driller Valaris’ paper joined the trend.

The 5.2% senior notes due 2025 slipped 1¾ bid.

Steinhausen, Switzerland-based driller Transocean’s notes were also weighed down.

The 7½% senior notes due 2031 declined by 2½ points to close at 14½ bid.

Travel data in focus

Meanwhile, American Airlines’ issues were carried higher, traders said.

The 5% senior notes due 2022 tacked on 1¾ points to close at 66¾ bid. The 11¾% senior notes due 2025 garnered rose 2¾ points to close at 99½ bid.

The Fort Worth-based airline and others in the sector saw positivity after the market latched onto fresh travel data from the Transportation Security Administration.

For the week ended Sept. 13, the agency reported that an average of 738,038 people went through TSA checkpoints each day, a steady rise from previous weeks.

Last week, the company’s chief financial officer told a conference that it would likely petition the Treasury Department for a higher share of the $25 billion in payroll aid the government authorized in March.

Chicago-based sector peer United Airlines’ paper moved on different paths.

The 5% senior notes due 2024 closed level at 90 bid. The 4¼% senior notes due 2022 gained ¼ point to close at 94¼ bid.

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