Transocean, Nabors, Weatherford slip as oil sinks; Peabody, Hertz, Revlon improve

By Cristal Cody

Tupelo, Miss., March 18 – Distressed energy bonds mostly softened as oil prices plunged on Thursday.

Offshore driller Transocean Inc.’s 8% senior notes due 2027 (Ca/CCC) dropped 3½ points to 62 bid by late afternoon, a market source said.

Oil and gas drilling contractor Nabors Industries Ltd.’s 7¼% senior notes due 2026 (Caa1/CCC-/B-) traded 3 points weaker at 86½ bid.

Oil prices dove on Thursday after softening over the prior four sessions.

West Texas intermediate crude oil futures for May deliveries sank $4.60 to settle at $60.00 a barrel.

North Sea Brent crude oil futures for May deliveries shed $4.72 to settle at $63.28 a barrel.

Oil and gas company Weatherford International LLC’s 11% senior notes due 2024 (B3/CCC) fell 1¾ points to 97 bid, a market source said. The notes are yielding more than 12%.

Overall market tone turned negative with stock indices down across the board a day after the Federal Reserve left rates unchanged. The Dow Jones industrial average closed down 3.02%.

Treasury yields climbed with the 10-year benchmark note up more than 8 basis points at 1.73%.

The iShares iBoxx High Yield Corporate Bond ETF dropped 66 cents, or 0.76%, to close Thursday at $85.73.

Peabody Energy gains

Coal producer Peabody Energy Corp.’s 6 3/8% senior secured notes due 2025 (Caa1/CCC-) traded ¾ point higher to 45¾ bid on Thursday, a market source said.

The notes had softened earlier in the week after the company’s cash tender offer on $22.5 million of its 8½% notes due 2024 was completed in the previous week.

In January, Peabody Energy also completed a distressed exchange of its 6% secured notes due 2022 for new 10% secured notes due 2024 and 8½% secured notes due 2024.

The St. Louis-based company emerged from a Chapter 11 bankruptcy restructuring in 2017.

Hertz revs up

In bankrupt issues trading Thursday, car rental company Hertz Corp.’s 5½% notes due 2024 hit 90¼ bid, according to a market source.

The notes started the week trading Monday at 86¾ bid and were seen in the same session a week ago at 85¼ bid.

The notes ended February at 75½ bid.

Earlier in March, Hertz filed a joint Chapter 11 bankruptcy plan of reorganization and reported it received a $4.2 billion buyout offer from Knighthead Capital Management, LLC and Certares Opportunities LLC.

A hearing on the offer is scheduled for April 16 in the U.S. Bankruptcy Court for the District of Delaware.

The Estero, Fla.-based car rental operator filed for Chapter 11 bankruptcy in May 2020.

Diamond Sports better

In other distressed secondary trading, Diamond Sports Group LLC’s 5 3/8% senior secured notes due 2026 (Ba3/CCC+) moved up 1¼ points to 75¼ bid on more than $12 million of paper traded, according to a market source.

The company’s bonds have been pressured over the past month after parent company Sinclair Broadcast Group, Inc. reported in February soft guidance for the sports broadcast group, as well as an interest in liability management initiatives that could include a debt exchange or redemption.

S&P Global Ratings reported it would view such initiatives as equivalent to a default.

Earlier in March, Moody’s cited a negative outlook for the sports marketing company over uncertainty surrounding renewing carriage contracts with DISH, Hulu and YouTube.

Revlon improves

Meanwhile on Thursday, distressed cosmetics manufacturer Revlon Consumer Products Corp.’s 6¼% senior notes due 2024 (C/C/) edged higher in secondary trading, a market source said.

The notes traded at 36 bid late afternoon, up from 34¾ bid on Wednesday, 32½ bid on Tuesday and 31¾ bid on Monday.

Revlon reported better-than-expected fourth-quarter earnings results a week ago.

© 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.