Moss Creek Resources, Transocean up; Washington Prime notes stable; Intelsat steady

By Cristal Cody

Tupelo, Miss., April 1 – Distressed energy bonds traded mostly higher on Thursday as secondary activity thinned ahead of the early market close on Friday.

West Texas intermediate crude oil futures for May deliveries climbed $2.29 to settle at $61.45 a barrel.

North Sea Brent crude oil futures for May deliveries settled unchanged for a second day at $64.14 a barrel.

Oil and gas exploration company Moss Creek Resources Holdings Inc.’s 7½% senior notes due 2026 (Caa2/B-) improved about ¼ point to 81 bid during the session, a source said.

The notes are trading slightly softer than the 83½ bid area seen a month ago but stronger than where the issue traded in the 79 bid area at the start of 2021.

Offshore driller Transocean Inc.’s 7½% notes due 2031 (C/CCC-/) headed out more than 1½ points better on Thursday to the 49½ bid area, a source said.

Overall tone remained positive with stock indices ending higher ahead of the release of the Labor Department’s March jobs report on Friday and the 12 p.m. ET early market close for the Good Friday holiday.

The iShares iBoxx High Yield Corporate Bond ETF improved 21 cents, or 0.21%, to close Thursday at $87.07.

The S&P U.S. High Yield Corporate Distressed Bond index ended March with a 2.5% month-to-date total return and quarterly- and year-to-date total returns of 16.88%.

Washington Prime flat

Washington Prime Group, LP’s 6.45% notes due 2024 (C/D/C) traded mostly unchanged in the 61 bid range on Thursday, a market source said.

The notes have declined from the 73½ bid area in mid-February and down slightly from the 62 bid area seen at the beginning of January.

Washington Prime Group, Inc. reported the operating partnership staved off a default on the notes by entering a forbearance period with its lenders and noteholders that was set to end Wednesday.

The company said in an 8-K filing with the Securities and Exchange Commission on Monday that the noteholders and lenders have agreed to extend the forbearance period to April 14.

The company disclosed in February that the operating partnership withheld a $23.2 million interest payment on the notes that was due on Feb. 15.

The Columbus, Ohio-based shopping center real estate investment trust said it is continuing to engage in negotiations and discussions with the noteholders and lenders to restructure its capital structure.

Washington Prime reported in March that it was in discussions on a potential deleveraging or restructuring of the notes, which may need to be implemented by filing for Chapter 11 bankruptcy.

Intelsat Jackson eyed

Intelsat Jackson Holdings SA’s bonds were mostly unchanged in the distressed space on Thursday, a market source said.

Intelsat Jackson’s 5½% senior notes due 2023 were flat at 61½ bid. The notes have softened from 64 bid in the same session a month ago and 68 bid at the start of the year.

Intelsat Jackson’s 8½% senior notes due 2024 were not active and were last seen trading Tuesday at 63 bid.

The notes were quoted a month ago in the 65 bid area and at 71 bid at the beginning of the year.

Parent company Intelsat SA announced in February that it reached a Chapter 11 bankruptcy restructuring plan that would lower its debt to $7 billion from nearly $15 billion.

A U.S. trustee has objected to the company’s disclosure statement for the reorganization, according to a court filing on Thursday.

The satellite operator filed for Chapter 11 bankruptcy on May 4, 2020 in the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division.

Mallinckrodt in focus

Meanwhile, paper from bankrupt pharmaceuticals maker Mallinckrodt plc (/D/) steadied in secondary trading on Thursday and remain higher year to date, according to a market source.

Mallinckrodt’s 5¾% notes due 2022 were unchanged at 68 bid after softening ¾ point in the prior session.

The notes traded at 36¼ bid at the start of the year.

The company’s 5 5/8% notes due 2023 also were flat at 70¾ bid after climbing 2 5/8 points on Wednesday.

The issue was quoted at 37 bid at the start of 2021.

The company announced in March that it reached an agreement with a group of first-lien term lenders holding about $1.3 billion of its outstanding first-lien term loans to support its restructuring support agreement.

Mallinckrodt received approval on Feb. 25 to extend filing a bankruptcy restructuring plan until Aug. 9.

The company filed for Chapter 11 bankruptcy on Oct. 12, 2020 in the U.S. Bankruptcy Court for the District of Delaware.

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