Denbury Resources notes gain after false buyout report; CBL eyed on bankruptcy talk

By James McCandless

San Antonio, July 20 – The distressed debt space started a fresh week with much of the attention converging on the energy space.

Denbury Resources Inc.’s notes gained ground after its chief executive officer refuted a fraudulent buyout report.

With oil futures rising in the backdrop, Occidental Petroleum Corp.’s issues slipped while SM Energy Co.’s and Whiting Petroleum Corp.’s paper varied in direction.

Meanwhile, REIT CBL & Associates Properties, Inc.’s notes diverged amid reports that the company is considering bankruptcy.

Sector peer Washington Prime Group Inc.’s issues were under pressure.

Connected commerce name Diebold Nixdorf, Inc.’s paper declined after completing a $1.1 billion note offering and extending a credit facility.

Elsewhere, in the travel space, American Airlines Group Inc.’s notes dipped while United Airlines Holdings, Inc.’s issues saw mixed results.

Denbury gains

Denbury Resources’ notes were seen gaining at the beginning of the week, traders said.

The 4 5/8% senior subordinated notes due 2023 rose 1 point to close at 3 bid. The 5½% senior subordinated notes due 2022 tacked on ¼ point to close at 3 bid.

About $8 million of the two tranches were on the tape.

Early Monday morning, a press release attributed to the Plano, Tex.-based independent oil and gas producer announcing a buyout offer was put out, sending the company’s debt prices soaring in pre-market activity.

The offer was for $1.20 per share, about five times the stock’s closing price on Friday.

Shortly thereafter, Denbury issued a news release stating that the previous one was not issued by Denbury.

CEO Chris Kendall said that the company had received no such proposal and had reported the activity to the New York Stock Exchange.

“I think the company caught it early enough so there wasn’t much turmoil,” a trader said.

Oil names vary

With oil futures seeing a rise as the sector’s backdrop, distressed energy tranches varied in direction, market sources said.

West Texas Intermediate crude oil futures for August delivery picked up 22 cents to settle at $40.81 per barrel.

North Sea Brent crude oil futures for September delivery finished at $43.28 per barrel after a 14 cent pickup.

Houston-based producer Occidental Petroleum’s issues slipped to lower levels.

The 2.9% senior notes due 2024 shaved off ¼ point to close at 91 bid. The 2.7% senior notes due 2022 was docked ¼ point to close at 95 bid.

Denver-based E&P SM Energy’s paper saw varying movement.

The 5% senior notes due 2024 garnered 2¼ points to close at 58½ bid. The 6¾% senior paper due 2026 held level at 50½ bid.

Whiting Petroleum, another Denver-based peer, saw its notes move along different tracks.

The 6¼% senior notes due 2023 gave up ¼ point to close at 19 bid. The 6 5/8% senior notes due 2026 added ¾ point to close at 19¾ bid.

CBL notes diverge

Meanwhile, property name CBL’s issues were seen diverging, traders said.

The 5¼% senior notes due 2023 trailed by ¾ point to close at 25½ bid. The 4.6% senior notes due 2024 grabbed ¼ point to close at 25¾ bid.

After the Friday close, reports indicated that the Chattanooga, Tenn.-based real estate investment trust is preparing to file for Chapter 11 bankruptcy.

The company is in talks with its lenders to reach a pre-packaged agreement to restructure.

After the onset of the coronavirus pandemic, the company closed all of its indoor locations in order to comply with government mandates about slowing the disease’s spread.

Columbus, Ohio-based peer Washington Prime’s paper was under pressure.

The 6.45% senior notes due 2024 dipped 2 points to close at 43 bid.

Diebold declines

ATM maker Diebold’s notes were in decline, market sources said.

The 8½% senior notes due 2024 fell 1 point to close at 86¼ bid.

On Monday morning, the North Canton, Ohio-based connected commerce solutions name announced that it had completed an oversubscribed offering of $1.1 billion of five-year senior secured notes.

The company priced $700 million of 9 3/8% notes while its European counterpart sold €350 million of 9% notes on July 9.

Concurrently, the name also said that it had amended its senior credit facility to extend the maturity of about $330 million of its commitments to July 20, 2023 from April 30, 2022.

Airlines eyed

Elsewhere, in the travel space, American Airlines’ issues dipped, traders said.

The 5% senior notes due 2022 chalked off ½ point to close at 57½ bid.

Last week, the Fort Worth-based airline became one of the latest in the sector to warn of potential mass layoffs, effecting about 26,000 frontline workers.

The furloughs would be triggered in October, when the U.S. government’s payroll assistance is expected to end.

The company is expecting reduced demand through 2021.

Chicago-based air traveler United Airlines’ paper yielded mixed results.

The 5% senior notes due 2024 improved by 1 point to close at 81 bid. The 4¼% senior notes due 2022 closed level at 85¼ bid.

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