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California Resources notes lower as ratings cut; United Airlines eyed after layoff news
By James McCandless
San Antonio, July 8 – Closing out the Wednesday distressed debt space, the attention turned to energy and airlines.
California Resources Corp.’s notes declined after receiving a ratings cut based on the likelihood of a restructuring in the short term.
The 8% notes due 2022 shaved off ¼ point to close at 3¾ bid.
Early Wednesday, the Los Angeles-based independent oil and gas producer received a ratings downgrade from Moody’s Investors Service.
The agency slashed the company’s corporate family rating, probability of default rating and several issue-level ratings.
Moody’s cited its belief that a near-term debt restructuring is highly likely after deciding to skip interest payments on May 29.
Elsewhere, United Airlines Holdings, Inc.’s issues diverged after warning of potential furloughs.
The 5% senior notes due 2024 shed 2 points to close at 80 bid. The 4¼% senior notes due 2022 tacked on ¼ point to close at 87¼ bid.
On Wednesday morning, the Chicago-based airline announced that it was preparing to send furlough notices 36,000 U.S.-based frontline employees.
The potential move would affect about 45% of the airline’s workforce.
Meanwhile, American Airlines Group Inc.’s 5% senior notes due 2022 declined by 3¾ points to close at 52¼ bid. The 3¾% senior paper due 2025 lost 6 points to close at 42½ bid.
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