American Airlines notes rise as federal aid expires; Callon jumps after royalty sale

By James McCandless

San Antonio, Oct. 1 – Bond issuers in the travel and energy sectors were the focus of secondary trading on Thursday.

American Airlines Group, Inc.’s notes rose despite federal payroll aid for the industry expiring and the company enacting furloughs.

The 11¾% senior notes due 2025 gained ¾ point to close at 97¾ bid.

On Thursday, the Fort Worth-based air carrier’s structure ended on a positive note despite the expiration of the U.S. government’s $25 billion in payroll aid for the industry.

Early in the day, the company announced that it would furlough 19,000 of its workers this month, promising to reverse the move if more aid is passed.

In the oil and gas space, Callon Petroleum Co.’s paper jumped after the company announced it had sold a royalty interest.

The 6 1/8% senior notes due 2024 hopped up 6 points to close at 34¾ bid. The 6¼% senior notes due 2023 shot up 11¾ points to close at 44 bid.

Early Thursday morning, the Houston-based independent oil and gas producer announced that it entered into an overriding royalty interest transaction with Kimmeridge Energy, an energy-focused private equity firm, which generated gross cash proceeds of $140 million, Prospect News reported.

The company also issued $300 million of second-lien secured notes to Kimmeridge.

© 2015 Prospect News.
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