McDermott eyed after bankruptcy filing; L Brands notes lower despite analyst upgrade

By James McCandless

San Antonio, Jan. 21 – A truncated holiday week in the distressed debt space began with shifts in the energy and retail sectors.

McDermott International, Inc.’s notes moved higher despite its Chapter 11 bankruptcy filing on Tuesday morning.

The 10 5/8% senior notes due 2024 rose 3¾ points to close at 12¾ bid.

On Tuesday morning, the Houston-based oil and gas engineering company announced that it has the support of more than two-thirds of all its funded debt creditors for a restructuring transaction that will equitize nearly all its funded debt, Prospect News reported.

The agreement would eliminate over $4.6 billion of debt.

McDermott expects to fund its bankruptcy process with $2.81 billion in debtor-in-possession financing.

Meanwhile, retailer L Brands, Inc.’s paper declined despite an analyst upgrade based on potential asset sales.

The 5¼% senior notes due 2028 moved down 2 points to close at 96 bid. The 6¾% senior notes due 2036 lost 1¼ points to close at 93½ bid.

News broke on Tuesday that the Columbus, Ohio-based retailer had received an analyst upgrade from KeyBanc Capital Markets.

In a note, analysts said that its upgrade to overweight was based on the increased potential for a value-creating transaction, specifically the potential sale of struggling segment Victoria’s Secret.

© 2015 Prospect News.
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