Washington Prime flat; Intelsat, Diamond Sports soft; AMC rises; energy bonds mixed

By Cristal Cody

Tupelo, Miss., Feb. 18 – Distressed energy bonds were mixed as oil prices gave back some gains on Thursday.

North Sea Brent crude oil futures for April deliveries fell 41 cents to settle the day at $63.93 a barrel.

West Texas intermediate crude oil for March deliveries declined 62 cents to settle at $60.52 a barrel.

Transocean Inc.’s 7½% senior notes due 2031 (C/CCC-/) were quoted down more than 2 points at 47 bid, a market source said.

London-based oil and gas explorer Tullow Oil plc’s 7% senior notes due 2025 (Caa2/CCC+) climbed 2 points to 80 3/8 bid over the day.

Overall market tone was mixed with major stock indices all weaker on the day.

The iShares iBoxx High Yield Corporate Bond ETF dipped 12 cents, or 0.14%, to $87.49 on Thursday.

Washington Prime unchanged

Washington Prime Group, LP’s 6.45% notes due 2024 (C/C/C) were flat in late afternoon trading at 63¼ bid, according to a market source.

The 6.45% notes due 2024 (C/C/C) sank 9¼ points to 63¾ bid on Tuesday and traded at 62½ bid to 63½ bid going out Wednesday.

Washington Prime Group, Inc. announced in an 8-K filing with the Securities and Exchange Commission on Tuesday that the operating partnership withheld a $23.2 million interest payment on the 6.45% notes that was due on Monday.

If the payment issue is not resolved within 30 days, the missed payment will constitute a default.

The Columbus, Ohio-based shopping center real estate investment trust said in the filing that it has hired legal counsel and an investment banker to help in discussions with its lenders.

Intelsat Jackson weakens

Intelsat Jackson Holdings SA’s bonds slowed losses on Thursday but remain down from a week ago, a source said.

Intelsat Jackson’s 5½% senior notes due 2023 declined ½ point to 59½ bid.

The notes traded in the same session a week ago at 70¼ bid.

The company’s 9¾% senior notes due 2025 fell ¼ point to 60½ bid on Thursday.

In the same session last week, the bonds traded at 72¾ bid.

Parent company Intelsat SA announced Friday that it reached a Chapter 11 bankruptcy restructuring plan after filing for bankruptcy in May 2020 in the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division.

The satellite operator said the agreement with key creditors will reduce the company’s debt to $7 billion from nearly $15 billion.

Intelsat said it is requesting a March 17 hearing to seek court approval and establish procedures to solicit votes on the plan.

Mallinckrodt dips

Elsewhere, bankrupt pharmaceuticals maker Mallinckrodt plc’s 5 5/8% senior notes due 2023 traded at 53¼ bid on Thursday, ¾ point weaker from where the notes started the week, a market source said.

The issue is up from 51½ bid in the same session a week ago and better than where the paper traded at 42 bid at the start of the month.

The company (/D/) filed for Chapter 11 bankruptcy in October.

In a motion filed earlier in February with the U.S. Bankruptcy Court for the District of Delaware, Mallinckrodt said it has reached an agreement with restructuring support agreement parties to pursue a plan of reorganization.

On Wednesday, the company asked the court to approve the use of cash collateral to make a $114 million prepayment on its term loans.

In other distressed secondary trading, Diamond Sports Group LLC’s 6 5/8% notes due 2027 (B3/CCC-) saw more than $6 million of bonds traded Thursday with the issue headed out down 1½ points at 57½ bid, a source said.

AMC bonds better

Meanwhile, distressed movie theater owner AMC Entertainment Holdings, Inc.’s bonds continued to improve in the secondary market over Thursday’s session, a source said.

AMC’s 10½% first-lien senior secured notes due 2025 (Caa2/CCC) rose 1½ points to 103¾ bid.

The issue traded at the start of January at 73½ bid.

AMC’s 5¾% senior subordinated notes due 2025 (Ca/C) also were active, trading more than 1½ points higher at 47¾ bid on Thursday.

The company’s 12% second-lien senior secured notes due 2026 (Ca/C) climbed to 67¼ bid on Thursday from 65¾ bid in the previous day.

The notes traded at the start of the year at 27 bid.

AMC’s bonds have mostly been stronger since January after the company announced it secured additional funding.

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