Hertz notes mixed on new bankruptcy plan; AMC rallies; Moss Creek, Summit Midstream up

By Cristal Cody

Tupelo, Miss., April 5 – Hertz Corp.’s bonds were mixed in the first session back after the company reported over the Easter weekend that it selected a rival proposal to fund its exit from Chapter 11 bankruptcy.

The company’s 5½% notes due 2024 traded as high as 99 7/8 bid and headed out at 99 bid in heavy supply, a source said.

The notes were last seen trading March 31 in the 99 7/8 bid range.

The issue has climbed from trading at 53½ bid at the start of the year.

Hertz’s 7% senior notes due 2028 were seen about 2 points softer in thin trading at the 78 bid range, still improved from where the issue traded in January at the 48 bid area.

Hertz announced on Saturday that it selected an enhanced proposal from Centerbridge Partners, LP, Warburg Pincus LLC and Dundon Capital Partners, LLC to provide the equity capital to fund its exit from Chapter 11 and keep the company on track to exit bankruptcy in June.

The Estero, Fla.-based car rental operator filed an amended Chapter 11 plan of reorganization and related disclosure statement on Saturday in the U.S. Bankruptcy Court for the District of Delaware.

On March 2, Hertz 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.

Under both proposals, Hertz said it would eliminate approximately $5 billion of debt, have over $2 billion of global liquidity and completely eliminate all corporate debt on its European business.

Hertz said the new offer provided greater creditor support.

A hearing on the offer is scheduled for April 16.

Hertz filed for Chapter 11 bankruptcy on May 22, 2020.

AMC climbs higher

AMC Entertainment Holdings, Inc.’s bonds gained in mostly strong trading over Monday’s session, a source reported.

AMC’s 12% second-lien senior secured notes due 2026 (Ca/C) jumped 4¾ points to 87¼ bid on $18.5 million of secondary supply.

The 12% notes traded at the start of the year at 27 bid.

AMC’s 5¾% senior subordinated notes due 2025 (Ca/C) gained 5¼ points to 73¾ bid in lighter trading on about $2 million of volume. The issue was quoted in late January at 33½ bid.

The Leawood, Kan.-based movie theater owner reported in March that 98% of its U.S. locations are now open.

In other secondary trading, Centennial Colo.-based cinema advertising company National CineMedia, LLC’s 5¾% senior notes due 2026 (Caa3/CCC+) climbed about 1½ points from Thursday to 88½ bid over Monday’s session, a source said.

The notes traded at 74 bid as the year kicked off.

Energy bonds eyed

Overall market tone was strong with stock indices higher. The iShares iBoxx High Yield Corporate Bond ETF edged up 4 cents to close at $87.11.

Oil prices dropped over the session.

West Texas intermediate crude oil futures for May deliveries fell $2.80 to settle at $58.65 a barrel, while June deliveries settled down $2.80 at $58.68 a barrel.

North Sea Brent crude oil futures for June deliveries settled $2.71 lower at $62.15 a barrel.

In the secondary market, distressed energy paper was mixed, sources said.

Oil and gas exploration company Moss Creek Resources Holdings Inc.’s 7½% senior notes due 2026 (Caa2/B-) traded up about ½ point to 81½ bid.

Offshore driller Transocean Inc.’s 11½% senior guaranteed notes due 2027 (Caa3/CCC) fell 1¼ points to 86 bid.

Oil and gas drilling contractor Nabors Industries Inc.’s 7½% senior notes due 2028 (Caa1/CCC-) also softened 1 point to 82 bid.

Petroleum refiner PBF Holding Co. LLC’s 6% senior notes due 2028 (B3/B+/B+) traded 1¼ points higher at 75¼ bid by late afternoon.

The Woodlands, Tex.-based Summit Midstream Holdings, LLC’s 5¾% senior notes due 2025 (Caa2/CCC+) also rose 1½ points to 84½ bid.

S&P Global Ratings downgraded partnership parent Summit Midstream Partners LP in March, citing the company’s offer to exchange a portion of its 9½% series A preferreds for newly issued common units as distressed.

The exchange offer expires on Tuesday.

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