WeWork bonds soar; Hertz continues rise; CBL higher; Nabors flat; Transocean trades up

By Cristal Cody

Tupelo, Miss., March 26 – WeWork Cos. LLC’s bonds climbed 7¾ points in heavy secondary supply on Friday after announcing it will merge with a special purposes acquisition company and become a publicly listed company.

WeWork’s 7 7/8% senior notes due 2025 (/CCC+/CC) headed out at 100 1/8 bid on more than $58.5 million of trading volume, according to a market source.

The bonds traded at the start of 2021 in the 69 bid range.

The New York City-based flexible office share company announced Friday that it will merge with BowX Acquisition Corp. and become a publicly listed company in a transaction that values WeWork at an initial enterprise value of approximately $9 billion.

The transaction will provide WeWork with about $1.3 billion of cash, as well as a $550 million senior secured notes facility provided by SoftBank Group Corp., at closing.

The acquisition is expected to be funded with BowX’s $483 million of cash in trust, in addition to a fully committed $800 million private placement investment at $10 per share by investors including Insight Partners, funds managed by Starwood Capital Group, Fidelity Management & Research Co. LLC, Centaurus Capital LP and funds and accounts managed by BlackRock, Inc.

The merger is expected to close by the third quarter.

Hertz ticks higher

Bankrupt car rental company Hertz Corp.’s 6¼% notes due 2022 climbed 2½ points to 97½ bid over the day in robust trading action, a market source said.

The issue was seen at 87¾ bid in the same session a week ago.

The company’s 5½% notes due 2024 gained 2¼ points to 97¼ bid late in the day after trading 3 points higher in the prior session.

The notes traded at 90½ bid in the same session last week.

Hertz is nearing its exit from Chapter 11 bankruptcy after filing in May 2020.

On March 2, the Estero, Fla.-based car rental operator 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.

CBL notes stronger

Bankrupt real estate investment trust CBL & Associates LP’s bonds remained strong on Friday after climbing higher all week following the company’s report on Monday that it expects to eliminate $1.6 billion of debt under a new restructuring plan.

CBL’s 5¼% notes due 2023 added 2 points in secondary trading on Friday to 56¾ bid, a market source said.

CBL and 176 affiliated companies filed for Chapter 11 bankruptcy on Nov. 1 and Nov. 2 in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.

The Chattanooga, Tenn.-based owner and developer of malls and shopping centers reported Monday that under the new restructuring plan, more than $1.6 billion of debt and preferred obligations will be eliminated with noteholders receiving cash, new senior secured notes and other debt and equity in exchange.

The company received an extension through May 31 to file the new restructuring plan and an extension through July 29 to solicit votes.

Energy bonds mixed

Overall market tone improved on Friday with major stock indices all more than 1% higher on the day.

The iShares iBoxx High Yield Corporate Bond ETF closed up 27 cents, or 0.31%, at $86.92.

Oil futures recovered after declining in the previous session.

North Sea Brent crude oil futures for May deliveries settled $2.62 higher at $64.57 a barrel.

West Texas intermediate crude oil futures for May deliveries rose $2.41 to settle at $60.97 a barrel.

Energy bonds were mixed in fairly light trading action over the day, a source said.

Oil and gas drilling contractor Nabors Industries Inc.’s 5¾% senior notes due 2025 (Caa2/CCC-) were quoted mostly flat at 75½ bid in thin supply.

Steinhausen, Switzerland-based offshore driller Transocean Inc.’s 8% senior notes due 2027 (Ca/CCC) improved 1½ points to 60 bid on $3 million of issues traded, a source said.

In other distressed energy trades on Friday, Allentown, Pa.-based power company Talen Energy Supply LLC’s 6½% senior notes due 2025 (B3/CCC+/B) softened ½ point to 80¾ bid in thin secondary volume, a market source said.

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