U.S. Steel notes gain after analyst upgrade; Nordstrom better as earnings anticipated

By James McCandless

San Antonio, Nov. 24 – During the Tuesday session, the distressed debt market was focused on the manufacturing and retail sectors.

United States Steel Corp.’s notes gained ground during the day after the company’s stock received an analyst upgrade.

Sector peer Cleveland-Cliffs Inc.’s issues finished higher as well.

In the retail space, Nordstrom, Inc.’s paper ended at better levels as the market anticipated a third-quarter earnings release.

Specialty store name L Brands, Inc.’s notes varied in direction.

While oil futures continued a positive streak, Occidental Petroleum Corp.’s, SM Energy Co.’s and Callon Petroleum Co.’s issues improved.

Meanwhile, in travel, United Airlines Holdings, Inc.’s paper diverged while American Airlines Group Inc.’s notes picked up steam.

U.S. Steel notes gain

U.S. Steel’s notes gained ground during the day, traders said.

The 6 7/8% senior notes due 2025 moved up 1 point to close at 92½ bid. The 12% senior secured notes due 2025 added ¼ point to close at 114¼ bid.

The Pittsburgh-based steel manufacturer’s structure saw a spike through the Tuesday session after receiving an analyst upgrade.

An analyst at GLJ Research said in a note that the company’s common stock has been upgraded to “buy” from “hold.”

In the note, the analyst said that he foresees a revival in the high-end auto steel markets and rises in global steel prices.

The analyst also predicted that more government stimulus from the next administration is forthcoming.

In the company’s most recent earnings report, released late in October, U.S. Steel reported a loss of $1.21 per share and revenues of $2.34 billion.

Cleveland-based sector peer Cleveland-Cliffs’ issues finished higher as well.

The 5 7/8% senior notes due 2027 grabbed ½ point to close at 99¾ bid. The 6¼% senior notes due 2040 improved by 2¾ points to close at 92 bid.

Nordstrom improves

In the retail space, Nordstrom’s paper ended at better levels, market sources said.

The 5% senior notes due 2044 rose 2¼ points to close at 87½ bid. The 4 3/8% senior notes due 2030 jumped up 3¼ points to close at 92½ bid.

During Tuesday’s activity, the market focused on the Seattle-based department store chain’s paper as its third-quarter earnings numbers were anticipated for after-market release.

Just after the close, the company showed a profit of 22 cents per share, outpacing the 1 cent per share profit that analysts were expecting.

Revenues came in at $3.09 billion, just below predictions.

“There’s a lot of positive results coming out right now in retail that are being largely driven by online sales,” a trader said. “It will be interesting to see if that sustains for the next few quarters.”

Columbus, Ohio-based specialty store name L Brands’ notes varied in direction.

The 6¾% senior notes due 2036 picked up ¾ point to close at 108¼ bid. The 5¼% senior notes due 2028 sank 1½ points to close at 103½ bid.

Oil futures positive

While oil futures continued a positive streak, distressed energy tranches made improvements, traders said.

West Texas Intermediate crude oil futures for January delivery spiked $1.85 to cap the day at $44.91 per barrel.

North Sea Brent crude oil futures for January delivery finished at $47.86 per barrel after a $1.80 boost.

Houston-based independent oil and gas producer Occidental Petroleum’s issues were carried to higher levels.

The 2.9% senior notes due 2024 reached up ¾ point to close at 93½ bid. The 2.7% senior notes due 2022 garnered ¼ point to close at 98¼ bid.

Denver-based producer SM Energy’s paper followed the sector trend.

The 5 5/8% senior notes due 2025 were lifted 2¼ points to close at 54¼ bid. The 6 5/8% senior paper due 2027 moved up 3 points to close at 54 bid.

Houston-based E&P company Callon Petroleum’s notes were pulled upward.

The 6 1/8% senior notes due 2024 rose 3½ points to close at 39½ bid. The 6 3/8% senior notes due 2026 leaped up 4¾ points to close at 36½ bid.

Airlines active

Meanwhile, in travel, United Airlines’ issues diverged, market sources said.

The 5% senior notes due 2024 tacked on 1¾ points to close at 98½ bid. The 4¼% senior notes due 2022 shaved off ¼ point to close at 99¾ bid.

On Monday, the Chicago-based airline announced a plan to raise $1 billion in new capital through a stock sale.

In a Securities and Exchange Commission filing, the company said that it would raise the money through the sale of 25.3 million common shares.

The industry has been waiting for a new round of government stimulus, issuing thousands of furloughs until payrolls are subsidized.

Fort Worth-based air travel name American Airlines’ paper picked up steam.

The 5% senior notes due 2022 picked up 3¼ points to close at 83¼ bid. The 11¾% senior paper due 2025 reached up ¾ point to close at 110¾ bid.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.