ClubCorp bonds improve, trade active on takeover news; E&P names mostly better as oil prices gyrate

By Stephanie N. Rotondo

Seattle, July 10 – As distressed debt players returned to their desks after a shortened holiday week, market sources reported that, with some exceptions, volume remained constrained.

“As has been the case since the start of July, it’s been wickedly quiet,” one trader said.

“There wasn’t a lot of price movement or activity in general,” said another trader, adding that there were “probably a number of people that were out last week that are just getting back into the market.”

There was, however, at least one notable name for the day.

ClubCorp Holdings Inc. was “by far one of the more active names,” a trader said, as it was announced that the golf club operator was being taken over by private equity firm Apollo Global Management.

The 8¼% notes due 2023 pushed up “just under 3 points,” another trader said.

For its part, the company’s stock (NYSE: MYCC) jumped 30.15% on the news.

Meanwhile, the E&P sector continued to be in focus as domestic crude oil prices “vacillated on either side of positive territory,” a trader remarked.

The space was mostly better for the day, with West Texas Intermediate crude ending the session modestly higher.

For instance, Ensco plc’s 4½% notes due 2024 ticked up an eighth of a point to 76 5/8, according to a trader.

Noble Energy Inc. bonds were also trending upward, with a trader seeing the 7¾% notes due 2024 half a point higher at 77½ and the 5¼% notes due 2042 a full point better at 54.

Sanchez Energy Corp. was another gainer, as a trader saw the 6 1/8% notes due 2023 rising a quarter-point to 79¾.

And, California Resources Corp.’s 8% notes due 2022 closed up a deuce at 63½.

But not all E&Ps posted gains on the day.

Jones Energy Inc.’s 6¾% notes due 2022, for example, slipped a point to 71, according to a trader.

Denbury Resources Inc. was another loser.

“They are having a rougher time than most,” a trader pointed out.

He saw the 5½% notes due 2022 losing 1½ points, closing at 53½.

Another market source pegged the 6 3/8% notes due 2021 at 58½, off a point.

Last week, oil prices were pressured by news of mounting stockpiles and increased drilling activity. The data has also led many to allege that production cuts from the Organization of the Petroleum Exporting Countries – as well as some non-OPEC countries – have not done enough to stem the supply glut.

Some OPEC and non-OPEC oil producers plan to meet later this month in Russia to discuss what can or should be done.

ClubCorp takes a swing

News of a private equity takeover boosted ClubCorp’s 8¼% notes on Monday.

At one desk, a trader deemed the issue “up a couple points” around 111½.

At another desk, the notes were seen at 111 3/8, a gain of “just under 3 points.”

Dallas-based ClubCorp is one of the largest operators of golf and country clubs. But the company has seen its debt burden piling up and membership dragging. That led the company to say that it would miss its 2016 revenue and earnings guidance back in October.

Since then, management has been looking for ways to stay in business.

Enter Apollo Global Management, which said it would buy out ClubCorp for $17.12 a share, a nearly 31% premium over Friday’s closing share price.

The deal is expected to close in the fourth quarter.

© 2015 Prospect News.
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